The government has appointed Goldman Sachs as the transaction advisor for divesting its stake in four public sector banks.

Besides bringing in an estimated $3,3 billion from the stake sale, the divestment will help these banks to meet the market regulator’s minimum public shareholding norm of 25%.

While the government’s holding in Central Bank of India is 89.27%, in each of the other three banks it is more than 90%.

As of 30 June, the government held 94.61% stake in Indian Overseas Bank, 93.85% in Punjab & Sind Bank and 90.95% in UCO Bank.  

SEBI has given state-run listed companies time until 1 August 2026 to bring their minimum public shareholding under the regulatory norm.

Five state-run banks need to bring the government’s shareholding down to 75%. But in case of Bank of Maharashtra, the government, which currently owns 79.6% of the bank, needs to shed its stake by just 4.6%. Nidhu Saxena, the bank’s managing director and CEO, said that a capital raise of Rs 2,000 crore at the current stock price would suffice to comply with the SEBI norms. The bank plans to raise the amount through a qualified institutional placement (QIP) or an offer for sale.

The finance ministry’s Department of Investment and Public Asset Management has appointed Goldman Sachs to identify potential bidders for the government’s stake in the four banks and structure suitable deals. 

In FY25, the government initiated the stake sale process and sold minor stakes in these banks through the first tranche of QIP. This brought down the government’s stake in Punjab & Sind Bank by 4.4% from 98.25%, in Indian Overseas Bank by 1.77% from 96.38%, in UCO Bank by 4.4% from 95.39% and in Central Bank of India by 3.81% from 93.08%.

In October last year, Bank of Maharashtra raised Rs 3,500 crore. This increased the public shareholding in the bank to 20.4% from 13.5%.