Coal India, LIC, IOB, IRFC shortlisted for OFS in FY27 first two quarters
Synopsis
The Centre has lined up Coal India, LIC, IOB, and IRFC for phased OFS transactions in the first half of FY27 — part of a ₹80,000 crore disinvestment target that is 135% above last year's revised estimate. With FY26 having underdelivered, the government is betting on market stability and institutional appetite to make this year's numbers work.
Key Takeaways
Coal India , LIC , IOB , and IRFC have been shortlisted for offer-for-sale transactions in FY27 Q1 and Q2 .
The government may dilute up to 2 per cent in Coal India ; an LIC OFS is reportedly planned for July–September 2026 .
The FY27 disinvestment target stands at ₹80,000 crore — approximately 135 per cent above the FY26 revised estimate of ₹33,837 crore .
The government divested 2.17 per cent in IOB in December 2025 and 2 per cent in IRFC in February 2026 .
The Central Bank of India 8 per cent stake sale saw the non-retail OFS portion subscribed 2.35 times .
Finance Minister Nirmala Sitharaman has reaffirmed continuity in the government's asset-sale strategy.
The Centre has shortlisted Coal India Ltd (CIL), Life Insurance Corporation (LIC), Indian Overseas Bank (IOB), and Indian Railway Finance Corporation (IRFC) for phased share sales through offer-for-sale (OFS) routes in the first two quarters of FY27, according to reports. The move is part of the government's broader push to meet an ambitious ₹80,000 crore disinvestment and asset monetisation target for the financial year.
What the OFS Pipeline Looks Like
According to reports, the government is considering diluting up to 2 per cent stake in Coal India through an OFS. An LIC offer for sale is reportedly being planned for the second quarter (July–September 2026). Further stake dilution in both IOB and IRFC is under active consideration, with the exact timing contingent on prevailing market conditions.
Officials have indicated that the offers will be calibrated carefully to avoid triggering volatility — a signal that the government intends to time each transaction to periods of relative market stability rather than push through sales regardless of sentiment.
The ₹80,000 Crore Target and What It Demands
The FY27 disinvestment target of ₹80,000 crore is approximately 135 per cent higher than the revised estimate of ₹33,837 crore for FY26 — a steep jump that places significant pressure on the OFS pipeline to deliver. The government is relying on a combination of big-ticket strategic sales and OFS transactions in major public sector entities to shore up non-tax revenues.
Notably, this target comes after a year in which disinvestment progress was widely acknowledged to have lagged expectations, making FY27's ambition all the more consequential.
Recent Divestment Activity
The government has already been active on the divestment front in the current cycle. It divested a 2.17 per cent stake in IOB in December 2025 and a 2 per cent stake in IRFC in February 2026. Separately, an 8 per cent stake sale in Central Bank of India was announced, with the non-retail OFS portion subscribed 2.35 times, signalling healthy institutional appetite for select public sector names.
What the Government Has Said
Finance Minister Nirmala Sitharaman stated at the post-budget press conference that the government will continue to pursue all disinvestment proposals approved by the cabinet, signalling policy continuity despite slower FY26 progress. A senior government official described the plan as a 'very strong asset monetisation plan' backed by a clearly defined pipeline, adding: 'A pipeline is prepared, and the government hopes to reap the dividends from that.'
What to Watch
The pace of OFS execution in Q1 and Q2 of FY27 will be a key indicator of whether the government can meaningfully close the gap to its ₹80,000 crore target. Market absorptive capacity — particularly for large-cap PSU names such as LIC and Coal India — will be the critical variable. Any sustained equity market correction could delay or restructure the sequencing of these transactions.
Point of View
000 crore disinvestment target that is 135 per cent above last year's revised estimate is less a budget line and more a statement of intent — one that will be tested hard by market conditions. The government's stated preference for 'calibrated' OFS timing is sensible, but it also creates a sequencing risk: if equity markets turn volatile in Q1 or Q2, the entire pipeline could slip into H2, compressing execution time. LIC's OFS is the real bellwether here — its sheer size means it will absorb significant institutional bandwidth, and any mispricing could dampen appetite for the smaller names that follow. The FY26 shortfall is the uncomfortable backdrop to all of this; the government has not yet explained what structural changes ensure FY27 does not repeat it.
NationPress
5 Aug 2026
Frequently Asked Questions
Which companies has the government shortlisted for OFS in FY27?
The government has shortlisted Coal India Ltd, Life Insurance Corporation, Indian Overseas Bank, and Indian Railway Finance Corporation for phased offer-for-sale transactions in the first two quarters of FY27. The exact timing for each will depend on market stability.
What is the government's disinvestment target for FY27?
The Centre has set a disinvestment and asset monetisation target of ₹80,000 crore for FY27. This is approximately 135 per cent higher than the revised estimate of ₹33,837 crore for FY26.
When is the LIC OFS likely to happen?
According to reports, the LIC offer for sale is likely to be conducted in the second quarter of FY27, between July and September 2026, subject to market conditions.
What disinvestment has the government already carried out recently?
The government divested a 2.17 per cent stake in Indian Overseas Bank in December 2025 and a 2 per cent stake in IRFC in February 2026. It also announced an 8 per cent stake sale in Central Bank of India, where the non-retail OFS portion was subscribed 2.35 times.
Why is the government cautious about the timing of these share sales?
Officials have indicated that OFS transactions will be calibrated to stable market conditions to avoid triggering volatility. The government's approach is to match the pace of share sales with the stock market's absorptive capacity, ensuring that large PSU offerings do not overhang the market.
