DIPAM chief

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The government will continue to push asset monetisation and disinvestment to mobilise resources and help preserve its fiscal glide path, even as elevated crude oil prices and geopolitical uncertainties complicate the macroeconomic environment, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said.

“Our effort is to ensure that we are able to mobilise additional non-tax resources in a difficult year,” Chawla said, underlining the role of DIPAM in generating resources for the government through the monetisation of public assets and stake sales.

The department has built momentum in its efforts and will seek to sustain it, he said. The approach, however, will be shaped by the nature of each asset and the need to secure the best possible value from infrastructure and businesses built over several years.

The Centre has mobilised Rs 62,124 crore through disinvestment and asset monetisation so far in FY27, comprising Rs 55,757 crore from stake sales and Rs 6,367 crore from asset monetisation, against the Budget estimate of Rs 80,000 crore.

The proposed IDBI Bank strategic sale is expected to add a further Rs 26,500 crore to the Centre’s exchequer from its 30.48% stake, taking total mobilisation to approximately Rs 88,624 crore — around Rs 8,624 crore, or 10.8%, above the Budget target.

The combined sale of 60.72% in IDBI Bank to Fairfax for Rs 52,878 crore includes LIC’s share of the proceeds; only the government’s portion accrues to the Centre. The target is therefore expected to be exceeded once the IDBI transaction is completed and the proceeds are received.

Dipam is already on course for listing of three public sector enterprises and one InvIT in FY27, Chawla said. The three companies that are to be listed include India Infrastructure Finance Company Ltd (IIFCL), Mahanadi Coalfields Ltd and South Eastern Coalfields Ltd. The draft red herring prospectus for Mahanadi Coalfields has been filed, while work on the other two is under way. Chawla said all three companies were market-ready. Besides, for the upcoming InvIT additional national highway stretches have already been identified, Chawla said.

Oil shock and fiscal pressures

The push to mobilise resources comes at a time when high crude prices threaten to put pressure on the government's finances. Chawla acknowledged the uncertainty around oil, but said its impact would not be linear. “Higher oil prices could also improve the economics of alternative sources of energy, while the government would surely look to find the resources needed to keep the growth on track.”

In a lighter moment, he joked that Saturn was closet to Earth and, if one took a leaf from Indian mythology, it was not a good time for geo-politics. But, he added, “this too shall pass”.

More stake sales on the radar

Asked about stake sales in public sector listed companies in sectors that are in favour like defense, Chawla said these remain on Dipam’s radar, but are not on the immediate list. The department’s immediate focus is on transactions that are already well advanced. “Every asset is not the same. We assess each asset individually and choose a structure that helps maximise value, rather than adopt a uniform approach to monetisation,” he said.

Chawla acknowledged that the geopolitical environment had made the year difficult, but indicated that the momentum built in the department’s work would be carried forward.