How India's PSU stake-sale journey has evolved: Explained in 5 charts

The latest LIC stake sale marks another milestone in the government's disinvestment drive. Here's what the data reveals about PSU stake sales, disinvestment receipts and major listings

Last week, the government raised approximately ₹31,552 crore by divesting a 6.5 per cent stake in the Life Insurance Corporation of India (LIC) through an Offer for Sale (OFS) at a floor price of ₹382 per share, making it the country's largest-ever OFS.

 

The two-day OFS, held on August 4 and 5, drew strong demand, allowing the government to exercise its full green-shoe option. The sale also helped LIC meet the Securities and Exchange Board of India's (Sebi's) minimum public shareholding requirement, with public ownership rising to 10 per cent, roughly nine months ahead of the May 16, 2027 deadline.

 

 

The latest OFS marks the second dilution of the government's stake in LIC since its landmark listing in 2022, taking its holding from 96.5 per cent after the IPO to 90 per cent. The chart below tracks the government's ownership in LIC from its IPO to the latest OFS.

 

 

Until May 2022, the government held a 100 per cent stake in LIC. Amendments to the Life Insurance Corporation Act through the Finance Act, 2021, paved the way for the insurer's listing. In May 2022, the government sold a 3.5 per cent stake through an IPO at an issue price of ₹949 per share, raising roughly ₹21,000 crore. The transaction reduced the government's holding to 96.5 per cent, with public shareholders owning the remaining 3.5 per cent.

 

The latest OFS offered a 6.5 per cent stake, comprising a 2.5 per cent base offer and a 4 per cent green-shoe option. The sale took the government's holding down to 90 per cent and public shareholding up to the mandated 10 per cent.

 

The LIC transaction also offers a window into the broader evolution of India's PSU stake-sale programme -- from ambitious disinvestment targets and large-scale offerings to the growing number of government-backed companies in the listed space.

 

Disinvestment targets have frequently exceeded actual collections

 

 

The government's disinvestment programme has struggled to consistently meet the targets announced in the Budget over the years. An analysis of previous Budget documents shows that apart from a brief period of fiscal success in FY18 and FY19, when actual collections exceeded targets, the government has routinely missed its initial benchmarks. Actual collections peaked at ₹1,00,045 crore and ₹94,727 crore in FY18 and FY19, respectively.

 

The divergence was most striking in FY21 and FY22, when initial estimates spiked to historic highs of ₹2.10 trillion and ₹1.75 trillion, respectively. Pandemic-related disruptions, however, pushed actual receipts down to a fraction of these targets, at ₹32,886 crore and ₹13,531 crore, respectively. Although targets were subsequently lowered, collections remained subdued in the following years. From FY24 onwards, the government stopped announcing a standalone disinvestment target and instead clubbed disinvestment and asset monetisation under the broader ‘Miscellaneous Capital Receipts’ head.

 

The latest LIC OFS proceeds add substantially to the government's disinvestment collections for the current fiscal year. The government had realised ₹27,568.06 crore so far in FY27 through disinvestment and asset monetisation, according to official data. With the LIC sale added, the year's tally now stands close to ₹59,000 crore, against a budgeted ₹80,000 crore under miscellaneous capital receipts for the year.

 

Disinvestment remains a major component of non-debt capital receipts

 

 

Disinvestment has historically been a major source of India's non-debt capital receipts (NDCR), accounting for roughly between 70-85 per cent of the pool through much of FY15-FY21. Under the Ministry of Finance's accounting framework, non-debt capital receipts broadly comprise recoveries of loans and advances and miscellaneous capital receipts. The latter include proceeds from PSU disinvestment and, increasingly, infrastructure asset monetisation.

 

The reliance on disinvestment was particularly high in FY18, when receipts of nearly ₹100,000 crore accounted for around 86 per cent of NDCR, the highest share in over a decade. This dependence fell sharply in FY22 amid heightened global market volatility and delays in executing strategic-sale transactions, while relatively steady recoveries of loans and advances provided an alternative source of non-debt capital receipts. The share recovered in the subsequent year.

 

From FY24, disinvestment and asset monetisation were clubbed under MCR, so the share no longer reflects disinvestment alone. Instead, it represents a broader mix of capital receipts. The latest LIC OFS proceeds are expected to further increase the share of MCR in non-debt capital receipts this year.

 

LIC OFS tops the list of India's biggest PSU stake sales

 

 

Over the years, the government has raised substantial disinvestment proceeds by selling stakes in major PSUs through OFS and IPO routes. Apart from the latest LIC OFS, sizeable stake sales have included those of Coal India, Oil and Natural Gas Corporation (ONGC) and National Thermal Power Corporation (NTPC), among others. The government's stake-sale programme has also been influenced by Sebi's minimum public shareholding (MPS) requirements, which require listed companies to maintain a prescribed level of public ownership. For large government-backed companies, meeting these norms has provided an additional impetus for the government to reduce its holdings and expand public floats.

 

The number of listed CPSEs has steadily increased

 

 

As of mid-2026, there are 74 listed Central Public Sector Enterprises (CPSEs) and subsidiaries on the BSE and the National Stock Exchange (NSE), out of roughly 448 total CPSEs.

 

Over the past decade, the number of listed government-backed entities has increased steadily, from around 50 in 2016-17 to 74 in 2026, supported by successive public offerings and strategic disinvestment initiatives. The growing number and weight of CPSEs in stock indices and exchange-traded funds reflect the government's broader push to monetise state assets and increase public participation in government-owned companies.

 

Of the 74 entities tracked in the chart, 68 are corporate CPSEs, while the remaining six are major public financial and insurance entities, including SBI and LIC. The figure is therefore broader than the CPSE count reported by some official government sources such as Department of Investment and Public Asset Management, as banking and insurance undertakings operate under separate statutory and regulatory frameworks rather than the general Companies Act.