Big PSU Bank Disinvestment Move: Govt Eyes OFS for Some PSBs

According to official sources who spoke to NDTV Profit, the Center intends to implement an Offer for Sale (OFS) in Indian Overseas Bank (IOB) as part of its strategy to decrease its stake in public sector banks and adhere to minimum public shareholding requirements. The OFS is anticipated to be launched shortly in order to reduce the government's 92.44% ownership of Indian Overseas Bank.

This comes after the government successfully sold a 2.17% share in IOB through an OFS in December 2025, which was well appreciated by investors.

In order to satisfy public float requirements, the government is anticipated to continue selling stakes in public sector banks in the upcoming months, according to official sources.

The next banks to be considered for stake dilution are probably Punjab & Sind Bank and UCO Bank.

Currently, the government controls 90.95% of UCO Bank and 93.85% of Punjab & Sind Bank, both of which are substantially more than the minimum public shareholding requirement for listed businesses.

The Center's larger disinvestment policy, which aims to increase market liquidity in state-owned businesses while retaining majority control, includes the proposed stake sales.

The Department of Investment and Public Asset Management (DIPAM) has so far raised Rs 20,272 crore through disinvestment in FY27, according to official sources.

Separately, in an effort to raise funds through strategic share sales and the monetization of public assets, the government has set an asset monetization target of Rs 80,000 crore for the current fiscal year.

Source - NDTV Profit