Bank Sector IPO: RRBs all set to go for listing in FY26-27 amid disinvestments targets logged by government

NEW DELHI: The Government in a long-term initiative for the revenue generation and fund raising has been contemplating to bring more public sector banks under the control of private organisations for the disinvestments purpose which was currently logged for upcoming financial years. The Government in the Union Budget 2025-26 has set a combined disinvestment and asset monetization target of Rs 47,000 crore, coupled with miscellaneous capital receipts with the programme of National Monetization Plan for new projects. The target is set for lower than the Rs 50,000 crore estimate for FY25.

While, the government has stepped aside for getting into specific target for PSUs by announcing a new strategic target of National Monetization Plan (NMP) for 2025-2030 was announced to raise Rs 10 lakh crore for new projects.

Regional Rural Bank IPO; What to expect in future:

The Finance Ministry in December 2025 has reportedly picked out and directed three Regional Rural Banks Haryana Gramin Bank, Kerala Bank, and Tamil Nadu Gramin Bank to prepare and submit draft IPO plans by the end of March. The Draft IPO blueprints will be crafted through their respective sponsor banks and the Department of Financial Services, followed by the review meeting held by the DFS to gauze the listing readiness. All three banks have mentioned that Senior Officials and their sponsored institutions have participated in the review.

The banking association is working to come with capital planning committee and IPO sub-committee to finalize valuation and capital-raising criteria along with overall statutory requirements. According to officials related with the matter, a consolidated draft proposal is expected to be prepared and submitted by the half of this current financial year.

The Central government is targeting the listing of the at-least 5 regional rural banks for the next two to three financial-year with an expectation of almost three potential offering by the end of 2027 amid the consolidation of RRBs from 48 to 23 under the One State, One RRB initiative.

Currently, the RRB shareholding stands at 50% with the union government, 15% with state and 35% with sponsor banks.

Disinvestment Targets for Main Public Sector Banks:

IDBI Bank: The government has set a strategic path for the disinvestment target of IDBI Bank by selling significant government and LIC stakes with management control transfer. The complete disinvestment target will be achieved in the next two to three financial years.

Further the government has recently conducted offer for sale (OFS) in Bank of Maharashtra and Indian Overseas Bank, raising significant funds and moving towards SEBI’s minimum public shareholding norms. The government is further also planning to reduce stakes in UCO Bank, Central Bank of India, and Punjab & Sind Bank.

This action is cited as government’s major move and strategic shist towards broader plan to deepen capital market participation by banking organizations, emphasizing its improved financial matrix and future growth.