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Business & Stocks Economic Times Markets • Oct 15, 2026

Nilesh Shah on PSU Privatization: Lessons from Hindustan Zinc for IDBI Bank Divestment Strategy

💡 Key Takeaways

•Nilesh Shah advocates for the Hindustan Zinc divestment model for IDBI Bank.
•Retained minority stakes have generated over Rs 62,000 crore in value for the government.
•Strategic divestment aims to balance immediate fiscal needs with long-term wealth creation.

NEW DELHI [NCRBuzz Wire] — ### Strategic Divestment and Value Creation

**Kotak AMC Managing Director Nilesh Shah has identified the Hindustan Zinc divestment model as a benchmark for the government's ongoing PSU privatization efforts, specifically regarding IDBI Bank.** By retaining a minority stake while transferring management control, the government has successfully captured significant upside as the company scaled. This strategy ensures that the state remains a beneficiary of the entity's future growth trajectory.

### Financial Metrics of the Hindustan Zinc Model

**The government’s decision to maintain a minority stake in Hindustan Zinc has yielded substantial fiscal returns, with current valuations exceeding Rs 62,000 crore.** This model contrasts with complete exits, providing a recurring revenue stream and long-term capital appreciation for the exchequer.

| Metric / Aspect | Details |

|---|---|

| Subject Entity | Hindustan Zinc |

| Government Strategy | Strategic Divestment with Minority Stake |

| Current Valuation of Stake | > Rs 62,000 Crore |

| Target for Application | IDBI Bank Privatization |

### Implications for IDBI Bank

**Nilesh Shah emphasized that the IDBI Bank divestment should prioritize long-term value creation over immediate cash realization.** By applying the lessons learned from the mining sector to the banking sector, the government aims to improve operational efficiency while retaining a stake in a potentially high-growth financial institution.

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🏛️ Background Context

The Indian government is currently pursuing the privatization of IDBI Bank as part of its broader disinvestment target. This follows a trend of moving away from full state control in non-strategic sectors to improve corporate governance and efficiency.

💡 Citizen & Commuter Quick Explainer (FAQ)

Q1: Why does this matter?

It highlights a strategy to maximize long-term national wealth by retaining minority stakes in privatized PSUs, rather than opting for a complete exit.

Q2: What is the immediate next step?

The government continues to evaluate the divestment process for IDBI Bank, balancing market conditions with the objective of long-term value creation.

Verified Wires: Economic Times Markets Original Wire Dispatch ↗

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