The Budget 2026-27 had estimated Rs80,000 crore through disinvestment and asset monetisation, as against Rs33,837 crore in the revised estimates for 2025-26. The steep target set by Nirmala Sitharaman, Union finance minister, came despite persistent historical challenges, as the government has routinely missed or significantly revised its divestment goals in previous years. In the current fiscal year, the government has raised Rs2,266 crore through the sale of 8.08 per cent stake in Central Bank of India via offer for sale. The government has now taken another baby step in that direction by approving the strategic sale of Indian Medicines Pharmaceutical Corporation Ltd (IMPCL) to Skymap Pharmaceuticals Pvt Ltd for over Rs121 crore. However, there is no official word yet on the big-ticket strategic transactions and stake sales – including the highly anticipated IDBI Bank and LIC disinvestments – which are expected to drive the realisations for this financial year.
A few months ago, IDBI Bank had to officially address market speculation regarding the cancellation of its government disinvestment process, clarifying that it has received no official communication about any cancellation from the relevant authorities. The bank has issued a clarification stating that the disinvestment process is managed by the Department of Investment and Public Asset Management (DIPAM) and that there would be no significant effect on the bank’s operations regardless of the disinvestment outcome. The privatisation process had previously been extended to 2026-27 due to geopolitical developments, with bids submitted by financial institutions, including Fairfax Financial and Emirates’ NDB. The recent clarification suggests the process remains under government review through DIPAM.
The government now says it is preparing a phased pipeline of Offer for Sale transactions across three of the four public sector enterprises in the first two quarters of 2026-27. Coal India, Life Insurance Corporation, Indian Overseas Bank and IRFC have emerged as the likely candidates. The rollout will be calibrated according to the market conditions, with the government keen on easing volatility before proceeding.
Among the specific transactions under consideration, the government may dilute up to 2 per cent stake in Coal India through an OFS. An LIC OFS is likely in Q2, between July and September. Further stake dilution in Indian Overseas Bank and IRFC is under active consideration, though the timing of the OFS hinges on market stability.
Skymap nets IPCL
As for LIC, at the time of filing of the red herring prospectus, there was talk of the government netting R60,000 crore through the sell-off. That number appears to have shrunk now. And, for IPCL, the government had received two financial bids for buying 100 per cent stake, along with management control, with Skymap Pharmaceuticals Pvt Ltd emerging as the highest bidder among them, at Rs121,00,94,400, which was also above the reserve price. Under the ministry for AYUSH (an acronym devised from the names of the alternative healthcare systems covered by the ministry: Ayurveda, yoga and naturopathy, Unani, Siddha, Sowa Rigpa and Homoeopathy), IMPCL is engaged in manufacturing and supplying standardised Ayurvedic and Unani medicines. The Cabinet Committee on Economic Affairs (CCEA) had granted ‘in-principle’ approval in November 2017 for the strategic disinvestment of the entire equity shareholding of IMPCL to a strategic buyer to be identified through a two-stage bidding process.
The strategic sale of IMPCL was approved by an alternative mechanism, a group of ministers empowered by the CCEA, comprising the minister for road transport and highways, the finance minister and the minister of state (independent charge) for the Ministry of AYUSH. The transaction was implemented through a structured two-stage competitive bidding process, involving multiple layers of evaluation, including an inter-ministerial group, a core group of secretaries on disinvestment, and the empowered alternative mechanism.
“A Letter of Award has been issued to the successful bidder,” the finance ministry added. “And the secretaries of DIPAM and AYUSH have been authorised to complete and close the transaction as early as possible”.
The government had, on 1 September 2023, issued a Preliminary Information Memorandum (PIM) inviting Expression of Interest (EoI) for IMPCL. Seven parties expressed interest, all of which were short-listed as qualified bidders. And the security clearance was obtained from the ministry for home affairs after due diligence. The Request for Proposal (RFP) and Share Purchase Agreement were issued on 1 December 2025, with two financial bids received by 20 January 2026. Both bids were technically qualified and opened in the presence of bidder representatives.