Government Unveils Divestment of PSU Stakes

The Department of Investment and Public Asset Management invites bids from merchant bankers and legal firms to assist with divestment in public sector banks. The initiative aims to help entities meet regulatory public shareholding norms by 2026, following Finance Minister Sitharaman's privatization announcement.

The Department of Investment and Public Asset Management (DIPAM) is actively seeking the expertise of merchant bankers and legal firms to facilitate the divestment of government stakes in public sector banks and listed financial institutions.

Under two recent requests for proposal (RFPs), DIPAM aims to empanel these advisors for a three-year tenure, with the possibility of a one-year extension. The goal is to support banks and financial institutions in attaining the minimum 25 percent public shareholding required by SEBI by the 2026 deadline.

Currently, several banks, including Punjab & Sind Bank and Indian Overseas Bank, fall short of this mandate, with high government holdings. This move follows Finance Minister Nirmala Sitharaman's announcement of plans to privatize two public sector banks and IDBI Bank, with the latter's process already underway.