Government Prepares FY27 Divestment Drive With OFS In Coal India, LIC, IOB And IRFC

The Centre is preparing a fresh round of divestment in FY27, with Offer for Sale (OFS) transactions being lined up in four major public sector companies: Coal India, Life Insurance Corporation of India (LIC), Indian Overseas Bank (IOB), and Indian Railway Finance Corporation (IRFC). The stake sales are expected to be rolled out in phases during the first half of FY27 as the government sharpens its focus on meeting its ambitious asset monetisation and disinvestment targets.

According to reports, the broader FY27 target for divestment and asset monetisation has been pegged at ₹80,000 crore, making it one of the government’s largest public asset sale programmes in recent years. Officials are expected to time each OFS carefully, with execution dependent on market stability, liquidity conditions and investor appetite.

Coal India And LIC Among Key PSU Stake Sale Candidates

Among the planned transactions, Coal India is expected to be the first major candidate. Sources indicate that the government may dilute up to 2% stake in the coal miner through the OFS route in early FY27. Separately, earlier reports in May had suggested the Centre was evaluating a larger 3–4% Coal India stake sale worth nearly ₹10,000 crore ($1.06 billion). As of 31 March 2026, the government held 63.13% stake in Coal India, leaving limited room before approaching the strategic 51% threshold.

For LIC, an OFS is likely to be scheduled in Q2 FY27 (July–September 2026). The government currently owns roughly 96.5% in the insurer. Any reduction in stake would also move LIC closer to public shareholding norms while improving market float. Given LIC’s scale and valuation, the transaction is expected to be among the most closely watched PSU offerings this fiscal.

IOB, IRFC Stake Sales Add Momentum To Disinvestment Push

Further stake dilution in Indian Overseas Bank and IRFC is also under active consideration. The government had already sold 2.17% stake in IOB in December 2025, followed by a 2% stake sale in IRFC in February 2026. In IRFC’s February OFS, the Centre initially offered 2% equity, along with an additional 2% greenshoe option, taking the total potential sale to 4%. The OFS was launched at a floor price of ₹104 per share, nearly 4.95% below the previous closing price of ₹109.40.

The latest pipeline comes soon after the government’s recently announced 8% stake sale in Central Bank of India, where the non-retail portion reportedly saw 2.35 times subscription, signalling healthy institutional demand for PSU paper.

With multiple PSU offerings now on the table, FY27 is shaping up to be a significant year for India’s disinvestment programme.

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Sources

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