India meets its asset sale target but plans further state stake sales

what happened

Arunish Chawla, secretary of India's Department of Investment and Public Asset Management, told ET in an interview that the government intends to keep selling assets for the rest of the fiscal year, even though this year's divestment goals have been reached. He said a second public InvIT is being prepared, three companies are ready for IPOs, and stakes in state-run banks will be reduced toward 75%.

The government earlier raised 9,500 crore by monetising some highway assets through Raajmarg Infra Investment Trust, which was listed in March 2026. So far this year, proceeds from OFS deals, InvITs and stake sales total 62,124 crore against a 80,000 crore target for the current fiscal year. The expected Fairfax purchase of IDBI Bank for 52,878 crore is expected to push the total above that goal.

State-run banks where the government holds more than 75% are treated as automatic candidates for stake reduction. Currently the state owns over 90% of Punjab & Sind Bank, Indian Overseas Bank and UCO Bank.

why it matters

For markets this signals that supply of shares in Indian state-owned companies and banks is likely to continue. The IDBI Bank deal depends on approval from the Reserve Bank of India, signed share purchase agreements and a completed open offer, so its timing could shift. A larger free float could weigh on the shares of state-run banks.

market impact

State-run Indian banks and IDBI Bank: continued stake sales add supply and pressure on their shares

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