CPSE dividend likely to cross record FY24 tally

The Centre may overshoot the Rs 56,260 crore target for dividend receipts from central public-sector enterprises (CPSEs) set for FY25 and is likely to end up getting around Rs 65,000 crore this financial year, according to a senior government official.

This excludes dividend from nationalised banks and financial institutions.

As on October 21, the Centre collected Rs 28,913 crore as dividend and other investment from CPSEs, accounting for over 50 per cent of the Budget Estimate for FY25.

Against the Revised Estimate of Rs 50,000 crore for FY24, dividend from CPSEs yielded the Centre Rs 63,749 crore, the highest in any financial year.

“CPSEs are providing good dividend, thanks to the efforts of DIPAM (Department of Investment and Public Asset Management) and the boards of all CPSEs to enhance profitability.

"The government has also made timely efforts to increase professionalism within CPSEs, which has contributed to their growth,” said the official.

So far in FY25, oil and gas companies are the top dividend payers, contributing Rs 9,665.63 crore, followed by the power, mining, and communications sectors respectively.

Indian Oil has paid Rs 5,090.54 crore, followed by Hindustan Zinc (in which the government owns a 29.54 per cent stake) with Rs 3,619.06 crore, Telecommunications Consultants India with Rs 3,442.92 crore, and Bharat Petroleum Corporation with Rs 2,413.29 crore.

The official said the government was working to amend its 2016 guidelines regarding dividend payment, bonus issues, and share buybacks by CPSEs.

“Given the strengthened balance sheets and improved market capitalisation of CPSEs, it’s time to reconsider the capital-restructuring guidelines,” the official said.

The finance ministry issued comprehensive guidelines on “Capital Restructuring of CPSEs” in May 2016 for their efficient management.

According to the guidelines, every CPSE is required to pay a minimum annual dividend of 30 per cent of profit after tax or 5 per cent of net worth.

Additionally, every CPSE with a net worth of at least Rs 2,000 crore and a cash and bank balance of over Rs 1,000 crore is required to opt for share buybacks.

As on September 30, of the 389 CPSEs and their subsidiaries, 70 are listed. Among the CPSEs, India has 13 Maharatna, 25 Navratna, 51 Miniratna I, and 11 Miniratna II.