The Indian government is considering selling minority stakes in four major state-run banks to comply with the public shareholding norms set by the Securities and Exchange Board of India (SEBI), a government source informed Reuters. The proposal aims to align with SEBI’s regulations that require listed companies, including government-owned firms, to maintain at least 25% public shareholding.
The four banks under consideration for stake dilution are Central Bank of India, Indian Overseas Bank, UCO Bank, and Punjab and Sind Bank. Currently, the Indian government holds significant stakes in these banks, with ownership figures standing at over 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, according to data from the Bombay Stock Exchange (BSE) as of September.
As per Reuters report, the finance ministry plans to seek the approval of the federal cabinet for this proposal in the coming months. The stake sale would likely occur through an offer for sale (OFS) in the open market, allowing investors to buy shares directly from the government.
The Securities and Exchange Board of India (SEBI) requires listed companies to maintain a 25% public ownership, however government-owned companies are exempted from meeting these requirements until August 2026.
The timing and scale of the stake sale will be determined based on the prevailing market environment, the source added, as reported by Reuters.
