The Centre is likely to surpass its Budget target of Rs 80,000 crore from disinvestment and asset monetisation in FY27, with the proposed sale of its 30.48% stake in IDBI Bank expected to fetch more than Rs 26,000 crore. The transaction could push total disinvestment proceeds past Rs 1 lakh crore, marking the highest annual collection in at least eight years.
On Wednesday, the government approved the sale of a controlling stake in IDBI Bank to a subsidiary of Canada-based Fairfax Financial Holdings, founded by Indian-origin billionaire Prem Watsa. The proposed transaction is valued at Rs 52,878 crore, with the government and Life Insurance Corporation of India (LIC) selling a combined 60.72% stake at Rs 81 per share. The government will sell its 30.48% stake for over Rs 26,000 crore, while LIC will divest its 30.24% holding. The share purchase agreement is expected to be signed and executed by the end of calendar year 2026.
The government has set a target of Rs 80,000 crore through disinvestment and asset monetisation in FY27. According to data from the Department of Investment and Public Asset Management (DIPAM), the Centre had mobilised Rs 55,757 crore through disinvestment as of September 10. Including the IDBI Bank sale proceeds, disinvestment collections alone would exceed the Budget target, even without accounting for asset monetisation.
This would be the first time since FY19 that the government surpasses its disinvestment target. In FY19, it raised Rs 94,727 crore against a target of Rs 80,000 crore. In FY18, disinvestment proceeds crossed Rs 1 lakh crore.
With nearly six months remaining in the current financial year, the IDBI Bank transaction could help the government record its highest-ever annual disinvestment proceeds, provided the sale is completed within the financial year. Disinvestment proceeds have declined sharply since FY19, falling to a low of Rs 10,163 crore in FY25. Since FY11, the government has met its disinvestment target only twice — in FY18 and FY19.
The IDBI Bank sale would provide a significant boost to the Centre's non-debt capital receipts and could offer additional fiscal room amid global economic uncertainties. However, the transaction's contribution to the FY27 fiscal position will depend on the timing of its completion and receipt of the proceeds.
The government has set a fiscal deficit target of 4.3% of GDP for FY27.
