"We are in talks with the Railway Board for sale of government equity in certain PSUs managed by Indian Railways, a source told PTI.
There are about half a dozen companies which are managed by Indian Railways. These include RITES, IRCON, IRFC, IRCTC, and RailTel Corporation.
Since these companies are not listed it is likely that the initial public offer (IPO) will be accompanied by government offloading its stake.
Indian Railways, which is facing cash crunch, is looking at various ways to mobilise resources for undertaking its expansion programme.
Government has already pitched for reforms in Railways by proposing Foreign Direct Investment and Public Private Partnership (PPP) to meet the resource crunch.
"The disinvestment will be a part of the government exercise to engage private players in ancillary services as part of overall agenda," the source added.
The Finance Ministry plans to raise Rs 43,425 crore through disinvestment in PSUs in the current fiscal.
A host of companies have been lined up by the disinvestment department as candidates for stake sale. These include SAIL, NHPC, ONGC, REC and PFC.