New Delhi, Feb 25 (KNN) The Indian government is set to undertake minority stake sales in select state-run banks and financial companies through the offer for sale (OFS) route, according to a notice on the Department of Investment and Public Asset Management (DIPAM) website.
To facilitate the process, bids have been invited for appointing merchant bankers and legal advisers, with a submission deadline of March 27.
Though the document did not specify the banks involved, reports suggest the government plans to dilute stakes in Central Bank of India, Indian Overseas Bank, UCO Bank, and Punjab and Sind Bank.
The move aims to align with the market regulator’s public shareholding norms, which require a 25 per cent public stake in listed companies. However, government-owned firms have been granted an exemption until August 2026.
Currently, the government holds significant stakes in these banks—over 93 per cent in Central Bank of India, 96.4 per cent in Indian Overseas Bank, 95.4 per cent in UCO Bank, and 98.3 per cent in Punjab and Sind Bank. It also owns 80 per cent of Bank of Maharashtra.
In the past, public sector banks used Qualified Institutional Placements (QIPs) to raise capital and reduce government ownership. The new OFS plan continues this trend, focusing on minority stake sales rather than full privatisation.
This strategic shift comes after the government shelved its broader privatisation plans, halting majority stake sales in at least nine state-owned entities due to ministry opposition.
Despite this, minority stake sales have proven effective, helping the government raise Rs 8,625 crore (USD 993.2 million) in the current financial year.
The appointment of merchant bankers and legal advisers will be for a period of three years, ensuring a structured approach to the stake sale process.
(KNN Bureau)
