Goldman Sachs got appointed as the global investment banking firm, the sole transaction advisor for the stake sale in four public sector banks (PSBs)—UCO Bank, Central Bank of India, Punjab & Sind Bank, and Indian Overseas Bank (IOB) by the Indian Government recently.
Goldman Sachs Bagging The Sole Transaction Advisor Position For PSBs
It appears that Goldman Sachs will be responsible for structuring the deal while identifying potential investors, and ensuring smooth execution of the stake sale.
This latest move by the government is majorly part of the Centre’s broader banking sector reform strategy which is mainly aimed at improving the operational efficiency and market competitiveness of public sector banks.
It is also an indication that the government is preparing to dilute its equity stake in each of the four banks by up to 5%.
They are planning to execute this disinvestment in tranches which will be commencing in the current fiscal year (FY26) and spread over the next two to three years.
Achieving MPS Compliance
The Department of Investment and Public Asset Management (DIPAM) has already approved Offer for Sale (OFS) transactions for five PSBs, including the four mentioned above, as per a media report.
In the meantime, the Bank of Maharashtra is expected to meet the 25% minimum public shareholding (MPS) requirement through a Qualified Institutional Placement (QIP) route.
Besides this, the government is also expected to request an extension of the August 2026 deadline for achieving MPS compliance, likely pushing it to 2027, as equity dilution will occur gradually.
Considering the present situation, the government holdings in all four PSBs stand at 89% or higher.
While all that happens, the government is also preparing to invite financial bids for the strategic sale of IDBI Bank between October and December 2025.
They would be selecting a successful bidder by the end of FY26, said DIPAM Secretary Arunish Chawla in the media report.
This latest move by the government is part of their efforts to bring down its stake in public sector banks which is aligned with broader efforts to enhance governance standards, deepen capital markets, and comply with SEBI’s MPS norms.
