New Delhi, India (diplomat.so) - India's government aims to raise between 180 billion and 200 billion rupees ($2.2 billion to $2.4 billion) through the sale of stakes in state-run firms by the end of the fiscal year on March 31, a senior government official revealed to Reuters on Friday.
Prime Minister Narendra Modi's administration departed from its traditional practice of setting a stake sale target in the budget unveiled on Thursday. The government reduced the stake sale target for the current year from 510 billion rupees to 300 billion rupees, to be achieved through both stake sales and asset monetization by March 2024.
Modi's agenda to privatize state-run firms has been delayed due to upcoming elections, but his government has executed more stake sales than any previous administration.
For the fiscal year ending March 2025, the government has opted not to set a target, breaking from usual practice.
Tuhin Kanta Pandey, the top bureaucrat at the Department of Investment and Public Asset Management, disclosed that New Delhi anticipates receiving an additional 120 billion rupees through asset monetization in the current fiscal year.
However, Pandey emphasized that the government will not aggressively pursue minority stake sales solely because state-run companies' shares are at record highs.
Regarding the shares of Life Insurance Corp of India (LIC), Pandey stated that the government will closely monitor its financial and share price performance before considering further share sales. He expressed the government's desire for retail investors, who subscribed to the IPO, to benefit from LIC's recent share price surge of nearly 60% since November.
Pandey highlighted challenges in selling Hindustan Zinc (HZL) shares due to decisions made by the company's management over the last two years, which have deterred both existing and potential investors. HZL, in which the state owns a 29.54% stake, has proposed demerging its businesses, currently under examination by the government.
Pandey affirmed the government's commitment to privatizing state-run companies like Shipping Corp of India and BEML, disclosing plans to list SCI's demerged land company within a month, paving the way for privatization.