The government will focus on minority stake sales and the listing of profitable central public sector enterprises (CPSEs) in FY27 to mobilise resources and bridge the shortfall caused by the failure to execute the IDBI Bank strategic sale, sources said.
In addition to disinvestment through minority stake sales, the government is likely to accelerate asset monetisation.
Out of Rs 80,000 crore in miscellaneous capital receipts, the government may have estimated around Rs 35,000 crore from the strategic sale of its stake on offer in IDBI Bank.
Strategic Recalibration
The Department of Investment and Public Asset Management (DIPAM) has been asked to step up preparations for the listing of unlisted CPSEs as well as undertake OFS in listed firms. However, the transactions are expected to be timed according to market conditions, given the volatility caused by the West Asia conflict.
Besides a likely OFS in Life Insurance Corporation (LIC), there could be a push to list several CPSEs, including Export Credit Guarantee Corporation (ECGC) and India Infrastructure Finance Company Ltd (IIFCL). OFS in a few other financial institutions are also expected, subject to market conditions.
IDBI Hurdle
The bid for the strategic sale of a 60.72% stake in IDBI Bank unravelled because of a steep reserve price of Rs 90,000 crore, sources had said. The offer comprised 30.48% from the government and 30.24% from LIC, along with transfer of management control.
The government has decided to restart the strategic sale of IDBI Bank, which could take some time, given market conditions.
The LIC board recently proposed the issuance of bonus shares in a 1:1 ratio. This may help facilitate an OFS in the insurer, as the lower per-share price could make the offer more affordable to a larger section of investors.
The Centre collected Rs 45,306 crore in miscellaneous capital receipts (Rs 16,886 crore in disinvestment and Rs 28,420 crore in asset monetisation), as against the revised estimate of Rs 47,000 crore and the previous revised estimate of Rs 33,837 crore.