IDBI Sale On Track, LIC Stake Dilution By FY27, Says DIPAM Secretary — NDTV Profit Exclusive

The Indian government is moving ahead with key asset sale plans, including the IDBI Bank stake sale and further dilution in Life Insurance Corporation, as part of its broader disinvestment strategy for the fiscal year, according to Secretary of the Department of Investment and Public Asset Management Arunish Chawla.

The focus remains on steady execution and long-term value creation, even as global economic conditions remain uncertain, Chawla told NDTV Profit in a televised interview, adding that the government aims to meet regulatory norms through structured divestments in public sector banks and central enterprises.

He also outlined ongoing efforts to monetise land and infrastructure assets of MTNL and confirmed a flexible approach to meeting minimum public shareholding targets.

Without disclosing exact timelines, Chawla reiterated that asset sales will be carried out in a phased and market-sensitive manner. He noted that multiple bids have already come in for key transactions, including public sector bank stake sales, and that due diligence is progressing on the IDBI Bank transaction.

The government has also extended deadlines for some firms to comply with SEBI’s public float rules, he added, suggesting that major sales could be staggered across the next fiscal cycle.

Chawla said the stake sale in IDBI Bank is proceeding as planned and is not affected by broader macroeconomic shocks. He described it as a strategic sale taking place through a multi-stage and multi-layered process.

“A data room has been set up, and due diligence has been completed. Negotiations on the share purchase agreement are currently underway,” he said.

On the question of further stake dilution in LIC, Chawla said the government aims to meet the minimum public shareholding requirement by the financial year ending March 2027, in line with the Securities and Exchange Board of India’s norms.

He added that weak investor sentiment does not necessarily halt progress. “A common mistake is assuming that nothing will move when investor sentiment is weak. Despite a Trumpian mood in the market, our in-house research indicates that certain stocks are good hedges. They offer attractive dividends and align with the government’s sustained capital expenditure policy,” Chawla said.

He added that the government plans to conduct small but regular offers for sale, keeping liquidity and retail investors in mind.

Chawla confirmed that the government is working to monetise non-core assets held by MTNL, including surplus land and infrastructure, to help repay debt.

He said the National Land Monetisation Corporation has been set up to streamline the sale of land assets across the country. “Recently, land monetisation metrics were approved to move forward with assets in a more organised and systematic manner. The aim is to expedite the disposal of MTNL assets, with a focus on efficiently unlocking their value,” he said.

He added that certain MTNL assets, including land parcels, will be monetised over the course of the year.

Chawla said the government has received strong interest from merchant bankers to assist in reducing its stake in public sector banks.

“Leading merchant banking firms, alongside prominent legal firms, have submitted applications, underscoring the competitive nature of the process. DIPAM is currently evaluating these submissions and carefully examining the bankers’ presentations to select the most suitable partners for this strategic divestment,” he said.

Chawla said improving public float in listed central public sector enterprises is a key priority this fiscal. He said most CPSEs have already met the mandatory 25% public shareholding requirement, and the remaining cases are expected to be resolved during the year.

He added that the government has extended the August 2025 deadline for some firms to comply with the minimum public shareholding norm. “Major stake sales will be re-evaluated accordingly,” Chawla said, indicating a more flexible and market-sensitive approach.