Govt eyes $20bn via IPOs of PSUs as PM Modi shifts focus from privatisation

India aims to raise 1.79 trillion rupees ($20 billion) by selling stakes in state-run firms through initial public offerings by the 2029/30 financial year, as the government shifts its approach away from outright privatisation.

The plan forms part of a wider strategy to raise $183.7 billion by monetising state assets over the next four years, according to a report released late on Monday by NITI Aayog, the government’s policy think tank.

The proposed IPOs will span multiple sectors, including railways, power, petroleum and natural gas, aviation, and coal. The initiative is part of Prime Minister Narendra Modi’s second four-year asset monetisation plan.

The first plan raised 5.3 trillion rupees by 2024/25, achieving nearly 90 per cent of the government’s 6 trillion rupee target.

New Delhi has previously faced challenges in raising funds through outright privatisation of state-run firms. In response, it has increasingly focused on monetising assets and subsidiaries of these companies to generate capital for reinvestment.

Plans to privatise state-run companies were deferred after Modi did not secure a complete majority in the 2024 general elections.

Under the current strategy, funds raised through asset monetisation are directed to the firms themselves for reinvestment. This approach reduces the burden on government finances to recapitalise these entities while allowing them to remain under state ownership.

Minority stake sales and privatisation remain part of the government’s broader efforts to reduce the budget gap, although specific divestment targets have not been set since 2024.

Stake sales in state-run firms

Under the new plan, the government aims to divest stakes in seven railway companies through IPOs, which could potentially raise 837 billion rupees by 2030, the report said.

Of this, 170 billion rupees is expected to be raised through stock market listings in the financial year beginning April 1, 2026. The report did not name the companies.

The government also plans to list subsidiaries of state-run power firms to raise 310 billion rupees over the next four years.

In addition, it expects to raise 483 billion rupees through IPOs of subsidiaries of Coal India and the renewable energy assets of NLC India Limited.

The Airports Authority of India will divest its stake in one subsidiary, as well as in four airports owned through joint ventures with private partners.

In the financial year 2027/28, the government plans to list GAIL GAS, a subsidiary of GAIL (India), which could raise 31 billion rupees, according to NITI Aayog.

(With inputs from Reuters)