With LIC IPO in sight, can government meet divestment target for FY22?

NEW DELHI: A surge in Omicron cases may spoil divestment process, ET NOW reported today quoting sources. The report said the divestment target for FY22 is unlikely to be met even if the government succeeds in completing the much-awaited LIC IPO.

The government could still remain short of Rs 50,000-55,000 crore from its budgeted FY22 divestment target of Rs 1.75 lakh crore, sources told ET NOW.

So far about Rs 12,300 crore has been fetched through stake sale and privatisation this financial year. This includes Rs 9,329.90 crore in divestment receipts from NMDC, HUDCO and SUUTI stake sale in Axis Bank, among others.



ET on Wednesday reported that LIC recently did a hard sell to institutional investors from across the globe positioning itself as the nimble giant growing fastest even while private sector insurers chart their growth paths. As per the report, the insurer showcased that even after two decades of private players in the industry, it still has nearly 65 per cent of new policies and is the only one that could capitalise on the opportunities in rural Bharat, with 71 per cent market share.

It is estimated that LIC IPO could fetch nearly Rs 1 lakh crore.

Sources told ET NOW that big ticket divestments such as BPCL and IDBI are unlikely to happen in the ongoing financial year. Pawan Hans may garner Rs 350-400 crore while BEML and SCI may together fetch Rs 3,600 crore if the divestment is done this financial year, the report said.

Going into 2022, Yesha Shah, Head - Equity Research at Samco Securities, said a pickup in pace of PSU disinvestments and a pro-growth budget and can act as a catalyst for markets.

Gaurav Garg, Head of Research at CapitalVia Global Research, also believes that the market needs to track the government's disinvestment and asset monetisation strategy going ahead.