India's equity fundraising through Offers for Sale (OFS) has reached an unprecedented high in 2026, primarily fueled by significant government activity. A total of 20 companies across 23 OFS deals have raised $7.53 billion (₹62,730 crore) so far this year. This marks the highest fund mobilization through this mechanism since data collection began, with government-owned companies accounting for over 93% ($7.01 billion or ₹58,425.12 crore) of the total. The government's increased use of OFS is a strategic move to bolster its revenues and meet its disinvestment targets.
The Life Insurance Corporation of India (LIC) played a pivotal role in this fundraising boom, with its $3.78 billion (₹31,514.89 crore) share sale standing as the largest OFS in Indian capital market history. This single deal contributed substantially to the government's disinvestment proceeds, helping the Centre achieve nearly two-thirds of its annual disinvestment target of $9.6 billion (₹80,000 crore) for FY27. As of now, $6.33 billion (₹52,716.02 crore) has been garnered through disinvestment, with over 98% ($6.22 billion or ₹51,787.29 crore) of this coming from the OFS route.
Despite the record fundraising, a significant portion of companies that utilized the OFS route this year, particularly public-sector enterprises, have experienced negative returns over the past 12 months. For instance, Indian Railway Finance Corporation (IRFC) saw a 29.66% drop, while LIC itself was down 6.84%. Experts like Deepak Jasani note that OFS are often used when promoters or existing investors need funds or believe the stock is fairly valued. Ajay Garg of Equiris Capital highlights that while the overall fundraising numbers are impressive, they are largely skewed by LIC's massive contribution; excluding LIC, roughly $3.6 billion was still raised, which is among the highest levels in the last 15 years.
The government's accelerated stake sales in state-owned firms are crucial as India faces macroeconomic headwinds and seeks to avoid widening its fiscal deficit. Since the beginning of the year, the government has offloaded shares in 10 companies, including Cochin Shipyard, Indian Railways Finance Corp, NHPC, and Coal India. This strategy has allowed the government to tap into domestic liquidity, which remains exceptionally deep and provides confidence for companies to access capital markets despite some volatility in benchmark indices.
