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Informist, Sunday, Feb. 1, 2026

 

--Sitharaman: Want to streamline PFC, REC going forward, not decided yet

--CONTEXT: Comments by Finance Minister Sitharaman at post-Budget briefing 

--Divest secy: Fully committed to close all privatisation, divest plans 
--Divest secy:On track to complete divestment transactions, including IDBI Bk 
--Econ secy: FY27 divest estimate based on strong asset monetisation pipeline 

--Sitharaman: All cabinet-approved disinvestments will be carried out 

 

NEW DELHI - The government's plan to restructure Power Finance Corp. Ltd. and REC Ltd. is aimed at streamlining the two non-banking finance companies, Finance Minister Nirmala Sitharaman told the media at the post-Budget briefing here Sunday. But the government is yet to firm up the restructuring plan, whether it would be through a merger or otherwise, Sitharaman added.

 

In her Budget speech for 2026–27 (Apr-Mar), Sitharaman earlier in the day proposed restructuring of the two state-owned NBFCs to achieve scale and improve their efficiency. Shares of PFC Sunday ended 0.6% higher at INR 381.50 and that of REC ended 1.2% lower at INR 359.85 on the National Stock Exchange. PFC had in FY19 acquired 52.63% shares in REC from the Government of India for INR 145 billion. The transaction was part of the government's divestment initiative, which has slowed down in the last three years.

 

But Sitharaman said that the Centre is committed to its divestment plan and will undertake all divestment and privatisation transactions approved by the Union Cabinet. All transactions are on track, including the privatisation of IDBI Bank, Divestment Secretary Arunish Chawla, who was also present at the briefing, said. The government had in 2022 invited expressions of interest to sell its 30.48% stake and Life Insurance Corp. of India's 30.24% stake in IDBI Bank. Shares of IDBI Bank ended 1.2% lower at INR 98.36 on the National Stock Exchange. 

 

The government aims to raise INR 800 billion as miscellaneous capital receipts through the divestment of its stake in public sector undertakings and asset monetisation in FY27, up sharply from the revised estimate of INR 338.37 billion for the current fiscal year, according to the Budget. The sharp upward revision in miscellaneous capital receipts is based on the government's strong asset monetisation pipeline, Economic Affairs Secretary Anuradha Thakur, who was also present at the briefing, said.

 

The Budget for FY26 had projected the receipts from divestment and asset monetisation at INR 470 billion. The government has not undertaken any big-ticket divestment transaction after the initial public offer of LIC. So far in FY26, the government has raised INR 87.68 billion by offloading minor stakes in Mazagon Dock Shipbuilders Ltd., Bank of Maharashtra, Indian Overseas Bank, and remittance from Specified Undertaking of the Unit Trust of India. In FY25, the government had raised INR 172.02 billion from such miscellaneous capital receipts against the target of INR 330 billion.

 

The government has been classifying revenue from divestment and asset monetisation as miscellaneous capital receipts since the Interim Budget of FY25. It discontinued the practice of giving a specific target for divestment receipts in that Interim Budget. The government had said keeping a fixed divestment target was difficult due to market volatility. Prior to FY24, the government had met its divestment target in only two out of the previous 10 years.  End

 

Reported by Krity Ambey

Edited by Vandana Hingorani

 

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