India's $2 billion state stake sales buck equity market slowdown

India’s federal government raised $2 billion through stake sales in listed state-run companies last quarter, providing a rare bright spot for the country’s subdued capital market after the conflict in the Middle East slowed broader equity issuance.

The government raised 185.6 billion rupees ($2 billion) by trimming its holdings in six companies in the three months through June, marking its largest such quarterly haul in recent years, according to data compiled by Prime Database. The deals also accounted for almost one-fifth of overall secondary equity sales in India during the quarter.

Among the key stake sales were Coal India Ltd. and NHPC Ltd., which together raised more than $1 billion for the government.

India’s equity capital market has had a muted start to 2026 as geopolitical tensions, volatile global markets and concerns about economic outlook have damped investor appetite for fresh share sales. While block trades and institutional placements have gained momentum, the market has yet to see a revival in new listings with the benchmark Nifty 50 index down almost 9% in the first half.

Prime Minister Narendra Modi’s government has relied on equity divestments in state-owned firms to bolster non-tax revenue, even as the recent oil price shock threatens to strain its fiscal position through higher import and subsidy costs.