India's National Monetisation Pipeline 2.0 Unveils Major Equity Divestment Strategy
The Indian government has set an ambitious target to raise nearly Rs 1.8 lakh crore through equity divestment in state-run enterprises, primarily via initial public offers (IPOs), over the next four years. This initiative forms a crucial part of the second phase of the National Monetisation Plan, as detailed in data released by Niti Aayog, the government's premier policy think tank.
Rail and Power Sectors to Lead Divestment Drive
The National Monetisation Pipeline (NMP) 2.0, which was officially unveiled on Monday, outlines specific sectoral targets. In the rail sector, the plan aims to generate Rs 83,700 crore through partial equity divestment in public sector undertakings (PSUs). This monetisation will be executed through IPOs and follow-on public offers (FPOs). According to the Niti Aayog document, the proceeds from this divestment are earmarked for reinvestment into the development of rail infrastructure, highlighting a strategic approach to fund critical upgrades.
Power Sector and GAIL Gas Also in Focus
Similarly, the power sector is poised for significant activity, with plans to raise Rs 31,000 crore through equity dilution in step-down subsidiaries of PSUs engaged in generation and renewable energy. This move is expected to bolster the sector's financial health and support green energy initiatives. Additionally, the strategy includes equity dilution of GAIL Gas through an IPO of a minority stake, projected to raise Rs 3,100 crore. These measures underscore a comprehensive effort to unlock value across multiple industries.
The NMP 2.0 represents a continuation of the government's broader economic reforms, aiming to enhance efficiency and attract private investment. By leveraging equity markets, the Centre seeks to optimize asset utilization while generating substantial revenue for infrastructure development. This phased approach ensures a structured rollout, with careful monitoring by Niti Aayog to align with national growth objectives.
