Looming polls, rocky market may dampen strategic sales

Until Sep, government could sell only 3% in Coal India and 5.36% in Rail Vikas Nigam Ltd

- Gulveen Aulakh & Rhik Kundu

The government’s disinvestment plan is likely to crawl for the rest of the year with few strategic sale transactions looking to be completed and even fewer public sector enterprises put up for sale.

Economists and experts said upcoming general elections next year and market volatility are the key factors which may be impacting investor interest in some of the ongoing disinvestment transactions as well as new ones.

“In the past too it has been seen that the pace of disinvestment does tend to be slower just before the elections and, hence, while the target for this year is about the same as was targeted for FY23, we had fallen short last year," said Madan Sabnavis, chief economist at Bank of Baroda.

A senior economist at a ratings agency, however, noted that in FY23 as well, the government had initiated a limited number of strategic sales and was unable to meet its target.