Deeper divestments in LIC, five PSBs on cards

Merchant bankers to be hired for extended period; Share sales via QIP route

- Subhash Narayan & Rhik Kundu

The Centre is looking to slash its ownership in Life Insurance Corp. of India (LIC) and several public sector banks (PSBs) beyond what's mandated by the Securities and Exchange Board of India (Sebi), two people aware of the plans said.

The government is looking to hire merchant bankers for three years, extendable by two more years, as it aims to sell the shares over time, the people said on the condition of anonymity. The sale aims to raise money for the government while capitalizing on favourable market conditions.

However, majority ownership and management control will remain firmly with the government.

"While some PSB stake sales may stretch beyond 2026, the plan is to go past Sebi's requirement over the next three to five years," one of the two people said.

"With LIC, the government will try to reach the regulatory level by 2027 and go beyond it later, as it would help bring in capital, though much will depend on market appetite."

With PSBs delivering strong performances and record profits in recent quarters, the government sees an opportunity to capitalize in the medium term. Led by State Bank of India, state-run banks cumulatively logged a record profit of ₹44,218 crore in the June quarter, up 11% from the previous year.