A report by CareEdge suggests that stake sales in public sector enterprises could help the Indian government raise up to Rs 11.5 lakh crore at current market rates, even with a majority stake of 51%. The top firms in terms of divestment potential are Indian Railway Finance Corporation Ltd, Hindustan Aeronautics Ltd, Coal India Ltd, and Oil and Natural Gas Corporation. The report warns that the government may not opt to divest all of its potential, and the decision to divest these listed firms may be influenced by industry strategic nature, profitability, financial market conditions, and welfare and social considerations.
The government has missed its disinvestment target for five consecutive years, so the report suggests that the government should consider big-ticket divestment plans, especially if the CPSE has been making consistent losses. The Interim Budget had set a target of Rs 500 billion for disinvestment under the head of miscellaneous capital receipts for FY25, and it is likely that the Union Budget may retain the target.
The report also notes that other plausible divestments include Pawan Hans and CONCOR, but they continue to remain on the slow burner. The report also notes that the conclusion of the election season and key market benchmarks like the Nifty50 provide an opportunity to advance significant divestment initiatives. However, past issues like procedural delays, litigations by labor unions and interest groups against divestment, and pricing issues may continue to slow divestment despite favorable market conditions.