Disinvestment proceeds hit four-year high in just over three months of FY27

Disinvestment proceeds during just a little over three months in the current fiscal (2026-27 or FY27) have reached the highest in four years, data from Department of Investment and Public Asset Management (DIPAM) showed.

Data showed the government completed seven ‘offer for sale through stock exchanges’ (OFS) and mopped up over ₹20,000 crore. These include Central Bank of India (over ₹2,200 crore), Coal India (over ₹5,500 crore), NHPC (over ₹4,300 crore), NLC (over ₹1,200 crore), GIC (over ₹3,000 crore), IRFC (over ₹2,000 crore) and Cochin Shipyard (over ₹1,700 crore).

OFS is a mechanism that allows promoters or major shareholders of a listed company to sell their shares to the public through the stock exchange platform. It requires less documentation and is much faster than IPO (Initial Public Offering) or FPO (Follow-on Public Offering).

Though the government has not disclosed how many OFS it is planning to complete in FY27, indications are about a strong pipeline including big ones such as Life Insurance Corporation of India (LIC) along with some of the Public Sector Banks and Financial Institutions. At the same time, there is also possibility of getting CPSEs such as Export Credit Guarantee Corporation (ECGC) and India Infrastructure Finance Company Ltd (IIFCL) listed on bourses.

Government officials are tight-lipped over the name of the next CPSE to be listed as there is thinking that announcement in advance affects the current market price. They also say that timing of the OFS will be fixed keeping market situation in mind.

The budget document now does not have the word disinvestment. Rather, disinvestment proceeds are placed under ‘Miscellaneous Capital Receipts’ (MCR). For FY27, Union Budget has pegged MCR at ₹80,000 crore. According to the budget document, these include receipts on account of management of equity investments and public assets through various mechanisms. Put simply, MCR primarily includes disinvestment (sale of minority share holdings and strategic disinvestment) and asset monetisation.

There are 68 CPSEs listed on stock exchanges. The value of government shareholding in these companies is over ₹22.80 lakh crore. Apart from these, 16 public financial institutions (banks and insurance companies) are also listed and the value of government shareholding in these institutions is around ₹19 lakh crore.

These data give enough headroom for the government to go for minority stake sale and earn a significant amount of money. In many companies, the government needs to bring down its stake to achieve the norm of Minimum Public Shareholding of 25 per cent in various CPSEs and public financial institutions. This will necessitate further OFS of CPSEs during the current fiscal year.

This is critical as receipts from taxes are expected to be lower, while revenue expenditure (such as subsidy on food and fertiliser) is expected to shoot up mainly on account of West Asia war. The first stress sign on central finances was when fiscal deficit in value term surged nearly 12 times in April-May period compared to the corresponding months of the last fiscal. As a percentage of BE, fiscal deficit was around 10 per cent as compared to 0.8 per cent during similar months of FY26.