Government Speeds Up Stake Sales in LIC and Other PSUs to Boost Disinvestment Receipts

The government is preparing to advance stake sales in eight public sector enterprises, including Life Insurance Corporation of India (LIC), as it seeks to strengthen revenues through disinvestment during FY27, according to a Bloomberg report citing people familiar with the matter.

The proposed transactions include minority stake sales in LIC, Hindustan Zinc and several state-owned banks. As per the report, the planned LIC offer could mobilise nearly ₹10,000 crore, while a stake sale in Hindustan Zinc may generate around ₹5,000 crore for the government.

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The latest push comes as the Centre looks to expand non-tax revenue sources while managing fiscal pressures.

Preparations Underway for Future Offerings

According to Bloomberg, officials overseeing the disinvestment programme have been holding weekly meetings with investment bankers to assess investor demand, determine pricing and finalise timelines for upcoming transactions.

The report added that the government is also appointing additional merchant bankers to prepare more public sector companies for future equity offerings.

LIC share price will remain in focus as investors track the timing and size of the proposed offering. Similarly, Hindustan Zinc share price may also attract attention if the planned disinvestment moves ahead.

IDBI Bank Sale Under Review

Bloomberg reported that the government is evaluating a fresh process for the proposed sale of its majority stake in IDBI Bank after the previous attempt failed to generate sufficient buyer interest.

According to the report, authorities are considering inviting revised bids while lowering the reserve price. Participation would be limited to bidders that had qualified in the earlier sale process.

The Ministry of Finance did not respond to Bloomberg’s request for comment on the proposed stake sale plans.

Disinvestment Drive Gains Momentum

The government has already raised nearly $2 billion through share sales during the April-June quarter of FY27, according to data compiled by Bloomberg. The amount exceeds the annual disinvestment proceeds recorded in each of the previous three financial years. The government’s disinvestment target for FY27 stands at ₹80,000 crore.

LIC share price and other PSU share price movements could remain under watch as the Centre advances its equity sale programme. Market participants are also expected to monitor Hindustan Zinc share price and IDBI Bank share price for any official announcements related to the proposed transactions.

The report noted that recent share sales by Coal India and NHPC received strong investor participation, encouraging authorities to continue with additional offerings. At the same time, future government stake sales are likely to compete for investor capital alongside several large initial public offerings expected to reach the market later this year, including proposed listings by major private sector companies.