From Privatisation To Rs 1.79 Lakh Cr IPO: Why Centre Changed It's Playbook? - Sector Specific Details

While the centre backed privatisation in 2021 and called for minimal presence in strategic sectors such as defence, and power, only two firm in the last decade have been truly privatised.

Air India was sold to the Tata Group for Rs 18,000 crore, and Neelachal Ispat Nigam to Tata Steel for Rs 12,100 crore.

Now, the government aims to raise RS 1.79 lakh crore through PSU IPOs by FY30. Earlier, the centre eyed at sell the govt's stakes in public sector companies, bring in private investment, and use the money raised to fund growth-focused public spending.

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The  New PSE Policy under the Aatmanirbhar Bharat framework classified 4 sectors as strategic (defence, power, transport, and banking), where the govt would keep reduce its presence. In every other sectors, PSUs would be either be privatised or closed.

Since 2016, 36 PSUs have been approved for sale, including BPCL, CONCOR, BEML and IDBI Bank.

Why Did India's Privatisation Goal Stall?

COVID-19 derailed planned sales of BPCL, CONCOR, and Shipping Corp as investor confidence collapsed.

The global shift toward green energy & fuel pricing controls scared off bidders. At the same time, select ministries resisted losing control. The government, therefore, change its playbook completely.

"Instead of selling PSUs outright, it will now list PSU subsidiaries and sell minority stakes while retaining control," noted Motilal Oswal. This new approach is part of a larger programme called NMP 2.0, or National Monetisation Pipeline.

The government's formal roadmap to raise money from its existing assets over FY26-30. The total target is Rs 16.72 lakh crore, with PSU IPOs alone accounting for Rs 1.79 lakh crore.

" NMP 1.0 (FY22-25) raised Rs 5.3 lakh crore against a Rs 6 lakh crore target. Now, of the ₹1.79 lakh crore pipeline, railway accounts for nearly half," Motilal Oswal said.

Railway PSU IPOs

Seven railway PSU IPOs are planned by FY30, with an estimated ₹83,700 crore expected from equity dilution across these companies.

Power Sector PSU IPOs

In power, NLC India and SJVN are carving out their renewable arms into separate listed entities. NLC India Renewables already has board approval to dilute 25% through an IPO. Meanwhile, IPOs of Coal India subsidiaries alone account for Rs 48,300 crore of the pipeline.

Aviation Sector PSU IPOs

In aviation, AAI plans to sell stakes in one subsidiary and four airports it runs through joint ventures.

Gas Sector PSU IPOs

Meanwhile in gas, GAIL's city gas arm, GAIL Gas, is lined up for an IPO in FY27-28.

While India has repeatedly missed disinvestment targets, listing "Rs 1.79 lakh crore worth of new PSU shares over 4-5 years will need careful timing and pricing," Motilal Oswal noted.

This move is expected to create new listed PSU names across railways, power, renewables, and airports, broadening access to sectors that were previously hard to invest in directly.