₹4.30 Lakh Crore Disinvestment: How PSU Stake Is Shrinking Since 2014

Data shows ₹4.30 lakh crore raised through stake sales in 11 years, with a clear pattern across sectors

There are no big announcements. No dramatic headlines. Yet, over the past decade, the Government of India has been steadily reducing its stake in public sector companies.

This is not something that happened overnight. Data available on the Department of Investment and Public Asset Management (DIPAM) website shows that since 2014, disinvestment has been happening year after year, across sectors and through different methods.

At first glance, it may look like routine financial activity. But when the numbers from 2015–16 to 2025–26 are seen together, a clear pattern emerges. Over these eleven years, the government has consistently reduced its stake in multiple PSUs through small but regular disinvestment.

In the early years, the government sold stakes in large companies such as NTPC Limited, Coal India Limited, Indian Oil Corporation and ONGC. These were limited stake sales, and the government continued to hold a strong majority.

Around 2018–19, the scale increased. More companies were included, and the methods expanded beyond Offer for Sale (OFS) to include exchange-traded funds and buybacks. This allowed the government to raise significant funds without drawing much public attention.

Take the case of Mazagon Dock Shipbuilders Limited. When it was listed in 2020–21, the government diluted about 15.17 percent through an IPO, bringing its holding to around 84.83 percent. In 2025–26, a further 3.61 percent stake was sold through OFS, reducing the government’s share to about 81.22 percent. This shows a step-by-step reduction rather than a one-time decision.

A similar trend is visible in Bharat Heavy Electricals Limited (BHEL). In 2025–26, the government sold around 5 percent stake, bringing its holding close to 58 percent. While control remains with the Centre, the margin above the 51 percent threshold has narrowed.

In the banking sector, the approach is more cautious. In 2025–26, the government reduced its stake in Bank of Maharashtra by around 6 percent, taking its holding to about 73.6 percent. In Indian Overseas Bank, a smaller reduction of about 2.17 percent still leaves the government with over 92 percent ownership. The pattern here is clear — dilution, but not exit.

There are also cases of complete exit. The government sold 100 percent stake in Air India in 2021–22. This remains one of the most significant privatisation decisions in recent years. Ferro Scrap Nigam Limited (FSNL) is another example where the government has stepped out fully.

At the same time, in strategic sectors like defence and banking, the government continues to retain strong control even after partial disinvestment. The reduction in stake is limited and calibrated.

Year-wise data shows that from 2015–16 to 2025–26, the Government of India has raised ₹4,30,133.18 crore through actual disinvestment receipts. This reflects a consistent use of stake sales as a source of non-tax revenue over the past decade.

This also ties into a larger fiscal pattern. As examined earlier in TheNews21’s World Bank Loan Trap series, the government has also relied on external borrowings alongside disinvestment, raising questions about how public finances are being managed.

Year-wise Disinvestment Receipts (2015–16 to 2025–26) – Government of India

The data shows a clear spike in 2017–18, followed by fluctuations in subsequent years, indicating changing strategies and market conditions in disinvestment.  

Source: Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, Government of India

This also raises an important question. When such a large volume of government stake is sold over the years, who is buying it? Are retail investors participating in meaningful numbers, or are institutional and foreign investors steadily increasing their presence in public sector companies?

Disinvestment over the past decade has not been limited to a few companies. It has covered a wide range of public sector enterprises across sectors. Major names where the Government of India has reduced its stake include companies in power, oil, defence, banking, insurance and infrastructure.

🔹 Core Infrastructure & Energy PSUs

• NTPC Limited (NTPC)
• Coal India Limited (CIL)
• Indian Oil Corporation (IOCL)
• ONGC (ONGC)
• Steel Authority of India Limited (SAIL)

🔹 Defence & Strategic PSUs

• Hindustan Aeronautics Limited (HAL)
• Mazagon Dock Shipbuilders Limited
• Cochin Shipyard Limited

🔹 Banking & Financial Sector

• Bank of Maharashtra (BoM)
• Indian Overseas Bank (IOB)
• Indian Railway Finance Corporation (IRFC)
• General Insurance Corporation of India (GIC)
• Life Insurance Corporation of India (LIC)

🔹 Railways, Ports & Services

• IRCTC
• Kamarajar Port Limited

🔹 Industrial & Chemical PSUs

• Bharat Heavy Electricals Limited (BHEL)
• Rashtriya Chemicals and Fertilizers Limited

🔹 Strategic & Special Cases

• Air India (100% disinvestment)
• Axis Bank (via SUUTI stake sale)
• IPCL (earlier privatised, now part of Reliance Industries)

The spread of these companies across sectors shows that disinvestment has not been sector-specific, but part of a broader policy approach. Seen together, these numbers point to a clear pattern. In some companies, the government has exited fully. In others, it has reduced its stake gradually while retaining control. And in certain sectors, dilution remains limited.

This is not a sudden shift. It is happening in small steps, year after year — and that is what makes it important to track.