Stake sales in public sector enterprises could help the centre raise as much as Rs 11.5 lakh crore at current market rates even while maintaining a majority stake of 51%, a new report by CareEdge has revealed.

“Of this, CPSEs could contribute around Rs 5 trillion, while PSBs and insurance firms could potentially add another Rs 6.5 lakh crore. This represents the maximum amount that could be raised at current market prices without the government losing governance control of these entities,” said the report released on Thursday.

Indian Railway Finance Corporation Ltd, Hindustan Aeronautics Ltd, Coal India Ltd, and Oil and Natural Gas Corporation are the top firms in terms of divestment potential mathematically, it said.

“To put things in perspective, Rs 11.5 lakh crore is a little more than twice the total divestment of Rs 5.2 lakh crore conducted since 2014,” the report said, but cautioned that the government may not opt to divest all of its potential and the decision to divest these listed firms may be influenced by the industry’s strategic nature, the companies’ profitability, financial market conditions and welfare and social considerations.

Noting that the government has missed its disinvestment target for five consecutive years, the report said that over the medium term, the government cannot rely solely on small ticket sales of minority shares by OFS to meet its divestment target and should take a fresh look at big-ticket divestment plans especially if the CPSE has been making losses consistently.

The Interim Budget had set a target of Rs 500 billion for disinvestment under the head of miscellaneous capital receipts for FY25 and it is likely that the Union Budget to be presented later this month may retain the target.

The report underlined that achieving this target hinges on the government’s ability to proceed with big-ticket divestments.

After the demerger of land assets of the Shipping Corporation of India (SCI), it’s possible divestment looks likely in FY25, provided favourable market conditions prevail, it said, adding that if the government offloads its entire stake in SCI, it could generate about Rs 125-Rs 225 billion as divestment proceeds.

Other plausible divestments include Pawan Hans and CONCOR. However, they continue to remain on the slow burner, the report noted, adding that the Petroleum and Natural Gas Minister has already shelved divestment plans of BPCL. It also said that the sale of minority stakes of government of about 45% in IDBI Bank now appears uncertain.

Further, with a bumper dividend from the RBI, the Centre’s fiscal position remains comfortable, which may limit the urgency to push ahead with big-ticket divestments.

According to the report, the conclusion of the election season, combined with key market benchmarks like the Nifty50 hovering around all-time highs, provides a perfect opportunity to advance some significant divestment initiatives. But, it noted that past issues like procedural delays, litigations by labour unions and other interest groups against divestment, and pricing issues may continue to slow divestment despite favourable market conditions.