The Government of India has successfully exceeded its fiscal year target of ₹80,000 crore through strategic stake sales in state-run firms and asset monetisation methods, according to government sources. Minister of State for Finance Pankaj Chaudhary confirmed that the government realised ₹45,306 crore in FY26, including ₹16,885.56 crore from disinvestment and ₹28,420.49 crore from asset monetisation. This achievement comes as public finances face pressure from the US-Israeli conflict with Iran, which has driven up fertiliser import costs and fuel subsidies. The government completed its largest divestment in years this week, raising ₹31,552 crore through the sale of shares in Life Insurance Corporation (LIC), demonstrating strong execution capabilities despite recent challenges. The two-day OFS held on August 4-5 drew strong demand, allowing the government to exercise its full green-shoe option at a floor price of ₹382 per share, making it the country's largest-ever OFS.
The Government of Singapore completed a significant divestment on August 5, selling 2.79 crore units representing 2.93% of outstanding units in IndiGrid Infrastructure Trust through open market block deals. According to exchange data, the transaction was executed at ₹174 per unit, generating ₹486.14 crore in proceeds. This sale reduced Singapore's total holding from 7.36% to approximately 4.43%, making it the trust's second-largest unitholder after the transaction.
Domestic institutions and asset managers demonstrated robust appetite for the stake sale, with National Pension System (NPS) Trust emerging as the largest buyer by acquiring 71.83 lakh units for nearly ₹125 crore, representing a 0.75% stake. Neo Group through multiple entities including Neo Markets Services, Neo Treasury Plus Fund, Neo Real Asset Yield Fund and Neo Investment Managers acquired 57.47 lakh units for ₹100 crore, equivalent to a 0.6% stake. Nippon India Mutual Fund purchased 42.25 lakh units worth ₹73.52 crore.
The government's fundraising success extends beyond major stake sales, with more than $5.5 billion raised to date through various asset monetisation methods. According to government sources, the long-delayed sale of the government's stake in IDBI Bank is expected to conclude this fiscal year, potentially adding $2.5 billion to state coffers. Finance Minister Nirmala Sitharaman has implemented quarterly targets for the divestment department to boost stake-sale receipts, reflecting a more systematic approach to asset monetisation. The government has increasingly relied on smaller stakes in listed state-run companies due to their easier execution and lower political and regulatory risks.
The government has received a significant boost from dividends, with ₹3.24 trillion received for April 1 to August 5, already exceeding the ₹3.16 trillion initially expected for the entire fiscal year. The Reserve Bank of India contributed a record ₹2.87 trillion, while the government expects non-financial state-run companies to pay ₹75,000 crore in dividends this fiscal year. However, officials face challenges from increased oil import costs and a 37% jump in subsidy spending for the April-June quarter, raising concerns about meeting the fiscal deficit target of 4.3% of GDP. As per N.R. Bhanumurthy from the Madras School of Economics, the government will need additional measures to meet its deficit target, noting that fuel tax cuts alone have cost the exchequer more than ₹1 trillion.
