1 week ago
The government is gearing up to launch a string of Offer for Sale (OFS) this fiscal year, including a much-anticipated stake sale in Life Insurance Corporation of India (LIC), according to Arunish Chawla, Secretary at the Department of Investment and Public Asset Management (DIPAM).
Speaking exclusively to CNBC-TV18, Chawla outlined a strategic roadmap that integrates disinvestment with a robust dividend strategy, aiming to strengthen public participation and returns from public sector enterprises (PSEs).
Confirming plans for a further disinvestment in LIC, Chawla said, “Yes, we would. We would also share it with retail shareholders and policyholders. We want LIC to be part of every household in the country.” He noted that strategies would be calibrated throughout the year depending on market conditions. The government currently holds 96.5% stake in LIC, after having divested a 3.5% stake through its IPO in 2022.
Mazagon Dock OFS: “We added a slight spark”
Reflecting on the recent Mazagon Dock OFS, Chawla described it as a well-timed move amid market skepticism. “Expectation theory tells you unanticipated shocks have real effects. We hit it right when the mood was ‘Trumpian’—everyone was shorting—and we added a little spark. By the end of the day, the issue was oversubscribed. Nothing succeeds like success,” he said.
The OFS is open for retail investors in Monday's session, after the non-retail portion was oversubscribed last week.
DIPAM’s Strategic Model for Market Timing
Chawla attributed the success to DIPAM’s in-house framework—the “DIPAM model”—which aligns corporate performance, dividend policy, and market dynamics. “We are relaxed, we are free from tension. Our model guides us on what to sell and when to sell. Mazagon Dock’s OFS was a result of that strategy. Expect more surprises down the line,” he said.
PSUs as Stock Market Role Models
Chawla emphasized the government’s commitment to making public sector companies “role models” for the Indian stock market. “It’s the PM’s vision to share public wealth with the aam aadmi, and we genuinely want PSUs to lead by example,” he said. He reiterated the government’s dividend policy for CPSEs — 30% of profit after tax or 4% of net worth, whichever is higher—ensuring returns for both the government and minority shareholders.
FY26 PSU Dividends To Break FY25 Record
The fiscal year gone by saw CPSEs pay record dividends of ₹1.4 lakh crore, with ₹74,000 crore going to the government and the rest benefiting senior citizens, retail investors, and mutual fund holders. “That’s our deliberate strategy—and we will continue to go down that road,” said Chawla. When asked if financial year 2026 could see an even better payout, he replied with a metaphor: “Like good players, we will dribble in the market, and off and on we will strike at the goal.”
Call to Corporate India: Share Wealth with Investors
Urging the private sector to mirror the CPSE model, Chawla said, “My suggestion to all small investors and mutual fund managers is to always include PSE stocks in your portfolio for consistent dividends. I also urge private corporates to declare fair dividends. Let’s make stock markets a fair place for the aam aadmi.”
