India seeks advisers for minority stake sales in State-run banks, financial firms

The government is looking to undertake minority stake sales in State-run banks and financial firms through an offer for sale, according to a document published on February 25, 2025, on the Department of Investment and Public Asset Management’s website, which did not name the lenders.

India has invited bids to appoint merchant bankers and legal advisers to sell the government's minority shareholding in select public sector banks and financial companies.

The government is looking to undertake minority stake sales in State-run banks and financial firms through an offer for sale, according to a document published on Monday (February 24, 2025) on the Department of Investment and Public Asset Management's website, which did not name the lenders.

The federal finance ministry is looking dilute minority shareholdings in Central Bank of India, Indian Overseas Bank, UCO Bank, and Punjab and Sind Bank, Reuters reported in November.

The plan to lower the government’s stake in banks and financial companies is required to comply with public shareholding norms mandated by the markets regulator.

The Securities and Exchange Board of India requires companies to maintain a 25% public shareholding, but has exempted government-owned firms from meeting these norms till August 2026.

The Indian government owns more than 93% in Central Bank of India, 96.4% in Indian Overseas Bank, 95.4% in UCO Bank and 98.3% in Punjab and Sind Bank. It also owns an 80% stake in Bank of Maharashtra.

In the past, public sector banks launched qualified institutional placements (QIP) to raise capital, which, in turn, reduced the government's stake in State-run banks.