Two Union government-owned companies, NTPC and Bharat Electronics, declared interim dividends on Friday, taking the cash-strapped Centre’s receipts on this count to Rs 7,500 crore over a month. This is over a fourth of the Rs 26,057 crore the government received as dividends in 2010-11.
In addition, the government has so far earned nearly Rs 1,500 crore in dividend distribution tax from public sector undertakings (PSUs) that have declared dividends, according to rough calculations.
In the past few weeks, six PSUs announced dividends. Some more have fixed board meetings to declare interim dividends. NMDC, Container Corp, MOIL, PFC, Powergrid and IDBI Bank have already called board meetings for sanctioning an interim dividend. Steel Authority of India has fixed the record date for interim dividend, according to stock exchange filings.
| Interim dividend declared by PSU | |||
| Company | DPS | Govt share | in Rs crore Total |
| ONGC | 6.25 | 3964.35 | 5347.18 |
| NTPC | 3.50 | 2438.58 | 2885.91 |
| Oil India | 25.00 | 471.50 | 601.14 |
| REC | 5.00 | 329.80 | 493.73 |
| GAIL (India) | 3.00 | 218.22 | 380.54 |
| BEL | 10.00 | 60.69 | 80.00 |
| Total | - | 7483.14 | 9788.50 |
| Forthcoming board meets to approve dividend | |||
| Container Corp | 03-02-2012 | ||
| IDBI Bank | 31-01-2012 | ||
| MOIL | 06-02-2012 | ||
| Power Fin | 03-02-2012 | ||
| Power Grid | 08-02-2012 | ||
| DPS: Dividend Per Share Data compiled by BS Research Bureau Source: Capitaline | |||
The NTPC board cleared a dividend of Rs 3.5 per share and BEL announced Rs 10 per share, resulting in receipts of Rs 2,438 crore and Rs 60 crore for the government, respectively. Rural Electrification Corp and GAIL India are other public sector firms to have declared dividends this week.
The government seems to be banking on dividend receipts to make good the shortage on account of the failed divestment programme. With just two months to go, the Centre has managed to sell shares worth Rs 1,145 crore against the targeted Rs 40,000 crore for 2011-12.
“The government has made several attempts such as PSU disinvestment and PSU buyback programmes to increase the revenue collection to help fiscal deficit management. However, many of these efforts have not yielded the results originally anticipated. Naturally, the government has to find new ways to augment revenue. One such is increasing the dividend receipts from PSUs,” Jagnnadham Thunuguntla of SMC Capitals said in a recent report.
For financial year 2010-11, the aggregate dividend given by PSUs to the government was Rs 26,057 crore. Seven -- ONGC, NTPC, Coal India, IOC, NMDC, SBI and BHEL -- gave more than Rs 1,000 crore each.
The government apart, minority shareholders in these companies benefit. Analysts say for investors who seek dividend yield, it may be an interesting time to keep these state-owned firms in the radar.
