Markets cheer ₹80,000-crore divestment target

Government's ₹80,000 Crore Disinvestment Plan Boosts Investor Interest in PSU Stocks

The Indian government's ambitious plan to raise ₹80,000 crore through disinvestment and asset monetisation in the next fiscal has sparked fresh investor interest in public sector company stocks, reviving equity markets after prolonged volatility driven by geopolitical and trade tariffs.

Historical Performance of PSUs Underlines Value-Creation Potential

Industry bodies have backed the push for disinvestment, with CII Director-General Chandrajit Banerjee advocating for a three-year rolling privatisation roadmap with phased stake reductions.

• Strategic disinvestments have led to sharper operational focus, improved capital allocation, and stronger market discipline.
• Post-disinvestment performance under private ownership typically shows improved operating metrics, stronger return ratios, and greater capital discipline compared to the public-sector structure.

Calibrated Stake Sales Can Unlock Value, Reduce Execution Risks

Vineet Bolinjkar, Head of Research at Ventura Securities, said the government's disinvestment track record demonstrates its ability to unlock value.

• Post-disinvestment performance typically shows improved operating metrics, stronger return ratios, and greater capital discipline.
• Calibrated stake sales can generate robust fiscal inflows while supporting long-term enterprise value creation.
• Buoyant equity markets also reduce execution risks and support better valuations.

PSUs After Disinvestment: Success Stories

Several public sector undertakings (PSUs) have delivered significant returns since disinvestment, with improved operating metrics, stronger return ratios, and greater capital discipline.

• Hindustan Zinc has delivered significant returns since its disinvestment in 2002, with market capitalisation rising from ₹237 crore to over ₹2.5 lakh crore by 2026.
• Anil Agarwal, Chairman of Vedanta, noted that Hindustan Zinc was once seen as outdated and inefficient. Today, it accounts for nearly 75 per cent of India's zinc production and has emerged as a major silver producer.
• The privatization of VSNL in 2002 and its transformation into Tata Communications turned a state monopoly into a global enterprise serving customers in 190 countries.
• The government also realised ₹348 crore from the sale of its stake in CMC Ltd, which was later acquired by the Tata Group and merged with Tata Consultancy Services.

Published on February 20, 2026