Prudent to set a disinvestment target below Rs 500 billion for FY25: ICRA

Disinvestment target: Given the uncertainties involved in market transactions, ICRA believes it would be prudent to set a moderate target of sub-Rs. 500 billion for FY2025, instead of a higher aim that may disrupt the budget math if there is a large shortfall in such receipts by the end of the fiscal, based on the trends seen in the past years. 

“This is similar to the target of Rs. 510 billion that was set for FY2024, although a sizeable miss is expected in the same, given the inflows garnered so far (Rs. 100.5 billion as of Jan 11, 2024),” ICRA said in its pre-budget note. 

Overall, the total receipts (combined revenue receipts and disinvestment receipts) of the GoI are estimated to display a growth of ~11 per cent in FY2025 Budget to Rs. 29.9 trillion, from the expected level for FY2024 (Rs. 26.9 billion in line with the budget estimate). 

According to them,  there are some strategic disinvestment plans of entities, whose expressions of interest (EoIs) are either in the pipeline or in Stage 2, such as the IDBI Bank, ConCor and NMDC Steel, the execution of most of these seems unlikely in the remaining part of the ongoing fiscal, leading to spillovers to FY25.