Markets cheer ₹80,000-crore divestment target

The government’s plan to raise ₹80,000 crore through disinvestment and asset monetisation in the next fiscal has stoked fresh investor interest in public sector company stocks and boosted equity markets emerging from prolonged volatility driven by geopolitical and trade tariffs.

The historical performance of public sector undertakings (PSUs) following disinvestment underscores the value-creation potential of such reforms.

Industry bodies have backed the push, with CII Director-General Chandrajit Banerjee calling for a three-year rolling privatisation roadmap with phased stake reductions. Strategic disinvestments have led to sharper operational focus, improved capital allocation and stronger market discipline.

Vineet Bolinjkar, Head of Research at Ventura Securities, said the government’s disinvestment track record demonstrates its ability to unlock value. Post-disinvestment performance under private ownership typically shows improved operating metrics, stronger return ratios and greater capital discipline compared with the public-sector structure.

Calibrated stake sales can generate robust fiscal inflows while supporting long-term enterprise value creation. Buoyant equity markets also reduce execution risks and support better valuations, he added.

PSUs after disinvestment

Hindustan Zinc has delivered significant returns since its disinvestment in 2002, with market capitalisation rising from ₹237 crore to over ₹2.5 lakh crore by 2026.

Anil Agarwal, Chairman of Vedanta, recently noted that the company was once seen as outdated and inefficient. Today, Hindustan Zinc accounts for nearly 75 per cent of India’s zinc production and has emerged as a major silver producer. Last year, it contributed nearly ₹20,000 crore to the exchequer, including ₹3,600 crore in dividends to the government.

The privatisation of VSNL in 2002 and its transformation into Tata Communications turned a state monopoly into a global enterprise serving customers in 190 countries. The Tata Group invested about $2 billion in submarine cables and digital infrastructure, positioning the company for growth in data, artificial intelligence and cloud services.

The government also realised ₹348 crore from the sale of its stake in CMC Ltd , which was later acquired by the Tata Group and merged with Tata Consultancy Services.

Published on February 20, 2026