Dividend receipts from CPSEs exceed revised estimates by 26% to Rs 63,000 crore

The Centre's dividend receipts from CPSEs have exceeded the revised budget estimate by 26 per cent to about Rs 63,000 crore, with PSU behemoths like Coal India, ONGC, Powergrid and GAIL making handsome payouts in the current fiscal.

The revised estimates of the Budget presented in Parliament on February 1 pegged dividend receipts from CPSEs at Rs 50,000 crore for the current fiscal.

The actual dividend collections have been about 26 per cent higher at Rs 62,929.27 crore in the 2023-24 fiscal ending March 31, 2024, as per the Department of Investment and Public Asset Management (DIPAM) website.

In March, the government received hefty dividend tranches from ONGC (Rs 2,964 crore), Coal India (Rs 2,043 crore), Power Grid Corporation of India (Rs 2,149 crore), NMDC (Rs 1,024 crore), HAL (Rs 1,054 crore) and GAIL (Rs 1,863 crore). In the last fiscal (2022-23), dividend receipts stood at Rs 59,952.84 crore.

Higher dividend is a reflection of the robust financial performance of CPSEs during the 2023-24 fiscal. The payouts by CPSEs also benefit retail and institutional shareholders and will help generate interest in PSU shares.

As per DIPAM's capital restructuring guidelines, CPSEs which do not have plans to deploy their capital optimally for business purposes should have a professional look at the surplus funds available to them. The CPSEs sitting on cash piles are required to pay dividends, which will, in turn, help keep investors interested in the stock.

The combined market capitalisation of CPSEs, banks and insurance companies has grown 500 per cent in the past three years from Rs 15 lakh crore to Rs 58 lakh crore. Also, the government's equity holding has risen 4 times to Rs 38 lakh crore from Rs 9.5 lakh crore in January 2021.