OFS fundraising reaches an all-time high in 2026, with LIC’s mega stake sale accounting for a major share of mobilisation
New Delhi: Fundraising through the Offer for Sale (OFS) mechanism on Indian stock exchanges has reached an all-time high in 2026, with a series of large stake sales by government-owned companies driving the record mobilisation.
So far in 2026, 20 companies have raised ₹62,730 crore through 23 OFS transactions, making it the highest-ever amount mobilised through the OFS route since comparable data became available.
A significant portion of the fundraising has come from government-owned companies. Of the total amount raised, more than 93 per cent, or ₹58,425.12 crore, was generated through stake sales by government-controlled entities.
The record fundraising has been driven particularly by the government’s increasing reliance on market-based stake sales to generate revenue and meet its disinvestment objectives.
LIC stake sale becomes the biggest driver
The mega stake sale by Life Insurance Corporation of India (LIC) earlier this month emerged as the biggest contributor to the record OFS fundraising.
LIC alone contributed ₹31,514.89 crore to the government’s disinvestment receipts, making the transaction a major component of the Centre’s fundraising programme for the current financial year.
The large LIC transaction significantly lifted overall OFS mobilisation and helped 2026 surpass previous records for funds raised through the mechanism.
Government gains confidence after successful OFS deals
Market participants believe that successful stake sales in Central Bank of India and Coal India in May strengthened the government’s confidence in using the OFS route for further disinvestment.
The OFS mechanism allows the government or other major shareholders to sell shares of listed companies directly through stock exchanges. It provides a relatively efficient way to monetise holdings while maintaining transparency through the exchange-based process.
The strong response to earlier offerings encouraged the government to undertake additional stake sales, particularly at a time when fiscal pressures have increased.
Crude oil prices add to government’s financial pressure
The government’s increased focus on disinvestment has also come amid concerns over elevated crude oil prices.
The US-Iran conflict and the resulting disruption around the Strait of Hormuz, a critical route for global oil shipments, pushed international crude prices higher.
Higher crude prices can have a significant impact on India’s economy because the country relies heavily on imports to meet its petroleum requirements. An increase in international oil prices can raise the import bill, put pressure on inflation and potentially constrain government spending.
Against this backdrop, additional revenue from stake sales provides the government with greater financial flexibility.
Government achieves nearly two-thirds of FY27 disinvestment target
The strong performance of OFS transactions has helped the Union government move closer to its annual disinvestment target.
According to data from the Department of Investment and Public Asset Management (DIPAM), the government has so far mobilised ₹52,716.02 crore through disinvestment.
The government’s total disinvestment target for FY27 is ₹80,000 crore. With the current collections, nearly two-thirds of the annual target has already been achieved.
This places the government in a relatively strong position to meet its full-year disinvestment target if market conditions remain supportive.
FY27 becomes strongest disinvestment year since FY19
In terms of total funds mobilised, FY27 is currently the strongest year for government disinvestment since FY19.
In FY19, the government collected ₹84,972 crore through disinvestment.
The current year’s performance has been particularly notable because of the increasing dependence on the OFS route. More than 98 per cent of total disinvestment receipts, amounting to ₹51,787.29 crore, have been generated through OFS transactions.
The figures highlight how central the stock-market-based mechanism has become to the government’s asset monetisation strategy.
Government-owned companies dominate OFS activity
The dominance of government-controlled companies in the 2026 OFS market is particularly striking.
Of the ₹62,730 crore raised through OFS transactions during the year, government-owned companies accounted for ₹58,425.12 crore.
This means that the government’s disinvestment programme is currently the primary driver of India’s OFS fundraising market.
Three companies — Indian Railway Finance Corporation (IRFC), Andhra Cements and East India Drums & Barrels — conducted two separate OFS tranches each during the year, contributing to the total of 23 transactions by 20 companies.
Record fundraising does not guarantee stock-market gains
Despite the record amount of capital raised through OFS transactions, the performance of the companies involved has not been uniformly positive.
More than half of the issuers have delivered negative returns over the past year, highlighting the difference between successful fundraising and shareholder returns.
While OFS transactions can help companies and large shareholders mobilise substantial capital, stock performance continues to depend on factors such as earnings growth, valuations, industry conditions, government policies and broader market sentiment.
OFS becomes an important tool for government finances
The latest figures underline the growing importance of OFS as a tool for the government’s disinvestment strategy.
For the government, selling stakes in listed public-sector companies provides a way to raise substantial funds without directly increasing borrowing. At the same time, such transactions can increase the public float of companies and potentially broaden their investor base.
However, the pace and timing of stake sales remain dependent on market conditions and investor demand.
Key Takeaway
India’s OFS market has reached a record ₹62,730 crore in fundraising in 2026, with government-owned companies accounting for more than 93 per cent of the total.
The massive LIC stake sale, which contributed ₹31,514.89 crore, has been the biggest single driver of the record mobilisation. Meanwhile, successful stake sales in Central Bank of India and Coal India have encouraged the government to make greater use of the OFS route.
With ₹52,716.02 crore already raised against the FY27 disinvestment target of ₹80,000 crore, the government has made significant progress towards its annual goal.
However, the fact that more than half of the OFS issuers have recorded negative one-year returns serves as a reminder that strong fundraising activity does not necessarily translate into strong stock-market performance.
For investors, the key focus will now be on upcoming government stake sales, market appetite for PSU shares and whether the government can maintain the current pace of disinvestment through the remainder of FY27.
