Three PSU IPOs and a Second Public InvIT: What the Government’s FY27 Plan Means for Investors

The Big Picture

India’s government is preparing for a busy year in the capital markets. DIPAM Secretary Arunish Chawla has indicated that the Centre plans to list three public sector companies in FY27: India Infrastructure Finance Company Ltd (IIFCL), Mahanadi Coalfields Ltd (MCL) and South Eastern Coalfields Ltd (SECL). The government is also planning its second public Infrastructure Investment Trust (InvIT), following the first public InvIT’s reported fundraising of around ₹9,200 crore in March 2026. For investors, these developments could open up new opportunities to participate in government-owned businesses and income-generating infrastructure. However, the actual investment potential will depend on valuations, financial performance and the final offer terms.

The Three PSUs in Focus

According to Chawla, all three companies are being prepared for listing. MCL has already filed its Draft Red Herring Prospectus (DRHP), while preparations for IIFCL and SECL are ongoing. 1. IIFCL: Financing India’s Infrastructure Established in 2006 and wholly owned by the government, IIFCL provides long-term financing for infrastructure projects, including roads, power and public-private partnerships. In FY26, the company reported a net worth of approximately ₹17,898 crore. However, its net profit declined by 36% to around ₹1,379 crore, partly due to mark-to-market losses associated with offshore borrowings. For potential investors, understanding these losses and the company’s future profitability will be important when evaluating its IPO. 2. Mahanadi Coalfields: A Major Coal Producer Headquartered in Sambalpur, Odisha, MCL is a subsidiary of Coal India and operates across the Talcher and Ib Valley coalfields. The company produced approximately 218 million tonnes of coal in FY26 and reported a net profit of around ₹10,698 crore. Its production scale and profitability will likely be key areas of investor interest. 3. South Eastern Coalfields: Another Major Listing Candidate Based in Bilaspur, Chhattisgarh, SECL is another Coal India subsidiary. It produced approximately 176 million tonnes of coal in FY26 and recorded a net profit of around ₹4,755 crore. While both coal companies have substantial earnings, investors will also need to consider coal demand, pricing trends, environmental policies and the broader outlook for the energy sector.

Who Receives the IPO Money?

The destination of the proceeds matters. Since the government is IIFCL’s sole shareholder, proceeds from its stake sale would go to the government. For MCL and SECL, proceeds from a stake sale would go to their parent company, Coal India, benefiting the government indirectly through its ownership of Coal India.

Why the Government Is Focusing on Bigger Listings

The government has already conducted several Offer for Sale (OFS) transactions during FY27. It now wants to focus on two or three larger listings instead of relying on numerous smaller stake sales. If these IPOs proceed, they would mark a return to government IPOs after a gap of more than two years, following IREDA’s listing in FY24. The government has reportedly raised around ₹62,124 crore in FY27 and has effectively met its ₹80,000 crore target for miscellaneous capital receipts. A major contributor is the proposed strategic sale of IDBI Bank. A combined 60.72% stake held by the government and LIC is being sold to Canada’s Fairfax Financial for approximately ₹52,878 crore. The transaction is expected to close by the end of FY27, subject to regulatory approvals, including RBI approval. These transactions reflect the government’s broader approach to raising capital through stake sales and asset monetisation.

The Second Public InvIT: Turning Highways Into Investment Opportunities

The government’s first public InvIT, Raajmarg Infra Investment Trust, sponsored by the National Highways Authority of India (NHAI), listed on the BSE on March 24, 2026. It was subscribed nearly 14 times and raised approximately ₹9,200 crore. The proposed second InvIT is expected to follow a similar model, backed by selected national highway stretches. Here’s how it works: operational highways generate toll revenue. These assets are placed within an investment trust, allowing investors to purchase units and participate in the income generated by the underlying infrastructure. For the government, this is a way to unlock capital from existing assets and reinvest it in new infrastructure projects. For investors, it offers another route to access infrastructure-related income, although returns are not guaranteed and market prices can fluctuate.

Key Financial Terms Explained

• PSU/CPSE: A public sector company in which the government holds ownership. CPSE specifically refers to a Central Public Sector Enterprise. • DIPAM: The Department of Investment and Public Asset Management, which manages the government’s investments and stake-sale process. • IPO: An Initial Public Offering is when a company offers shares to the public for the first time and seeks a stock exchange listing. • DRHP: A Draft Red Herring Prospectus is a preliminary IPO document detailing a company’s business, finances, risks and offer details. • OFS: An Offer for Sale allows existing shareholders to sell their shares. The proceeds go to the selling shareholders rather than the company. • Disinvestment: The sale of some or all of the government’s stake in a public sector company. Strategic disinvestment can involve transferring management control. • Asset Monetisation: Generating funds from existing assets, such as highways, without necessarily selling them outright. • InvIT: An Infrastructure Investment Trust pools investment into infrastructure assets and distributes income generated by them to unit holders, subject to applicable rules. • Mark-to-Market Loss: An accounting loss arising when an asset or liability is revalued at current market prices. Its effect on cash flow depends on the underlying transaction. • Net Worth: The difference between a company’s total assets and total liabilities. • FY27: India’s financial year running from April 1, 2026, to March 31, 2027.

What Investors Should Watch

Before making any investment decision, investors should look beyond the headlines and examine the details of each offering. • IIFCL’s profitability: Understand the reasons behind its profit decline and assess the risks associated with offshore borrowings. • Coal sector outlook: MCL and SECL have reported substantial profits, but coal demand, pricing, production and energy-sector policy could influence future performance. • IPO valuation: The issue price, valuation and percentage of shares offered will help determine whether an IPO is attractively priced. • InvIT income and risk: Examine toll revenue stability, debt levels, distribution history and the potential impact of market-price fluctuations. • Timelines and approvals: IPO schedules can change depending on regulatory clearances, market conditions and investor demand. An upcoming listing can attract attention, but a company’s fundamentals and the price at which its shares are offered matter more than the headline alone.

The Mingrow Currents Take

India’s FY27 listing pipeline highlights how the government is using capital markets to unlock value from public sector businesses and existing infrastructure. The proposed PSU IPOs could introduce investors to established companies, while a second public InvIT could expand access to infrastructure-linked investments. The key is to understand what sits behind the numbers: profitability, risk, valuation and the long-term outlook. For investors, informed decisions begin with clear financial information rather than market excitement. The same principle applies to businesses. As companies grow, keeping track of finances, operations, teams and business performance becomes increasingly important. Better decisions start with better visibility. At Mingrow, we believe businesses should spend less time managing scattered information and more time acting on meaningful insights. Explore Mingrow to discover how an AI-powered Business OS can help bring your business operations together and support smarter, data-driven decisions. This article is for information only and is not investment advice. Please read the official offer documents and consult a registered advisor before investing.

Sources:

Three more PSUs headed for stock market (Business Today) IIFCL, two Coal India units to list on D Street in FY27 (Business Standard) NHAI-sponsored RIIT maiden public issue listed on BSE (News On AIR)