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The Hindu
3 days ago
- Business
- The Hindu
PSU dividends to Centre almost double since 2020; over 40% comes from five fuel PSUs
Over the last five years, the Union government has nearly doubled the dividends it has received from public sector companies to ₹74,000 crore, with an analysis by The Hindu showing it relies heavily on a few oil, gas, and coal companies for a large chunk of these dividends. The analysis of company-wise dividend data from the Department of Investment and Public Asset Management (DIPAM) for the last five years shows that five fuel-related PSUs accounted for 42% of the total dividends the government has collected since the financial year 2020-21. The analysis excluded dividends from the Reserve Bank of India and the nationalised banks. These companies — Coal India Ltd, Oil & Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Gail (India) — contributed ₹1.27 lakh crore, or 42.3% of the total ₹3 lakh crore dividends the Centre received from non-banking PSUs between 2020-21 and 2024-25. Minimal cut in petrol prices The data also shows that the two directly-owned public sector oil marketing companies (OMCs) — IOC and BPCL — together saw a 255% increase in their dividend payouts to the government since 2022-23 and a 65% decrease in oil prices. However, they only passed on a 2% decrease in petrol prices to the public. The third public sector OMC, Hindustan Petroleum, is owned by ONGC, and not directly by the government. The total dividends from non-banking PSUs have also grown consistently since the COVID-19 pandemic. The government collected ₹39,558 crore as dividends from these companies in 2020-21, which almost doubled to ₹74,017 crore by 2024-25. High dividends offset slow disinvestment According to sources in the government, this is due to a 'calibrated' approach to balance revenues from disinvestments and dividends. 'The government's disinvestment policy announced during the pandemic is still very much in place, but it is not progressing as fast as it was initially hoped,' the official told The Hindu. 'At the same time, many PSUs are turning profitable and so the government is maximising the dividends it can earn from them.' The disinvestment policy, officially called the Public Sector Enterprises Policy, stated that the government would maintain a minimum presence in strategic sectors and would exit from all non-strategic ones. It was first announced as a part of the government's COVID-19 Atma Nirbhar Bharat package in May 2020. However, since then, enhancing dividends has also become a part of official policy. Mandatory minimum dividends An office memorandum sent out by DIPAM in November 2024 to all departments of the government and the managing directors of all PSUs laid out new rules for how much dividends these companies must pay their shareholders, the largest of which is the government of India. According to the new rules, every Central PSU must pay a minimum annual dividend of 30% of its Profit After Tax (PAT) or 4% of its net worth, whichever is higher. In fact, the government has pushed these PSUs to pay dividends much higher than this mandatory amount. 'The minimum dividend as indicated in para 5.1 above is only a minimum benchmark,' the office memorandum said. 'The CPSEs are advised to strive paying higher dividend taking into account relevant factors such as profitability, capex requirements with due leveraging, cash reserves and net worth.' High payouts IOC and BPCL saw their combined dividend payouts to the government increase 255% between 2022-23 and 2024-25, from ₹2,435 crore to ₹8,653 crore. Dividends of OMCs are paid from their profits, which themselves rise if the selling price of their fuel is higher than the cost of their inputs. While the price of crude oil has fallen 65% — from $116 a barrel in June 2022 to $70 a barrel in July 2025 — the retail price of petrol has only been reduced by ₹1.95 per litre, or 2%, over this period.
Yahoo
10-07-2025
- Business
- Yahoo
Indian government approves OFS in insurance giant LIC
The Government of Indian has reportedly approved an Offer for Sale (OFS) for a portion of its holdings in Life Insurance Corporation of India (LIC). Arunish Chawla, Secretary of the Department of Investment and Public Asset Management (DIPAM), in an interview with CNBC-TV18, confirmed the development. The move is part of the government's broader disinvestment strategy for the fiscal year 2025-26, aimed at increasing retail participation and unlocking value in the public sector insurance giant, the report said. Chawla was quoted by CNBC as saying: 'Yes, we would. We would also share it with retail shareholders and policyholders. We want LIC to be part of every household in the country.' Currently, the government's stake in LIC stands at 96.5%, with the public holding the remaining 3.5%. With the organisation's market capitalisation at Rs5.9trn ($68.9bn), the sale of a 1% stake could potentially yield around Rs60bn for the treasury. Earlier reports by CNBC-TV18 had identified LIC as a key candidate for stake sale among public sector undertakings (PSUs) this year. Details concerning the exact size, timing, and structure of the LIC stake sale are anticipated to be made public soon. LIC's initial public offering took place in 2022, marking its transition to a public-listed entity. In March 2025, a report by Economic Times suggested that, LIC was in discussions to acquire a significant stake in ManipalCigna Health Insurance, which would mark its entry into the health insurance market. However, the specifics of this potential acquisition have not been finalised. "Indian government approves OFS in insurance giant LIC" was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Time of India
20-06-2025
- Business
- Time of India
"Firm-by-firm" review: CPSE dividend may exceed target by 16%
New Delhi: The finance ministry is undertaking a comprehensive "firm-by-firm" review of its dividend policy for central public sector enterprises (CPSEs) and expects such surplus flow from non-financial entities to breach the FY26 budgetary target by 16%, a top official told ET. The ministry eyes dividend mop-up from non-financial CPSEs and other companies in which the government holds stakes to exceed ₹80,000 crore in the current fiscal, he said. This will surpass both the previous high of ₹74,017 crore realised last fiscal and the FY26 budgetary target of ₹69,000 crore. This assessment factors in expected pressure on the margins of state-run petroleum firms-together the biggest contributor to the dividend kitty-in the short run due to volatile global crude oil prices in the wake of the Israel-Iran conflict. This means the government expects the profits of CPSEs to remain strong across various sectors in the current fiscal year. New strategy The Department of Investment and Public Asset Management (DIPAM) is working out a composite strategy that would factor in a CPSE's profitability, capital spending and other operational requirements to ensure fair dividend payout, the official said. " DIPAM is following a composite strategy under which we have to balance their corporate performance, capex requirement and policy of fair dividends to shareholders," he said. DIPAM is also considering asking only listed CPSEs that are profitable to fork out dividends on a quarterly basis, he added.
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Business Standard
05-06-2025
- Business
- Business Standard
What's driving IDBI Bank shares higher? Stock zooms 36% in 4 weeks
IDBI Bank share price today IDBI Bank shares gained 4 per cent today to hit a high of ₹104.40 on the BSE in Thursday's intraday trade amid heavy volumes. In the past two trading days, the stock price of the private sector lender has rallied 6 per cent. Further, in the past four weeks, it has zoomed 36 per cent. Currently, IDBI Bank is trading close to its 52-week high level of ₹107.98, which it had touched on July 29, 2024. It has bounced back 58 per cent from its March 2025 low of ₹66.14 on the BSE. At 09:59 AM, IDBI Bank share price was quoting 2 per cent higher at ₹102.45, as compared to 0.52 per cent rise in the BSE Sensex. The counter saw huge trading volumes today with 14.57 million shares, cumulatively, changing hands in the first 45 minutes of trading on the NSE and BSE. What's driving IDBI Bank stock price higher? The government has been working on the privatisation of IDBI Bank for over two and a half years. On October 07, 2022, the Department of Investment and Public Asset Management (DIPAM) released a Preliminary Information Memorandum and invited expression of interest (EOI) from interested parties for a stake sale of up to 60.72 per cent in IDBI Bank, including the stake of the Government of India (GoI) (30.24 per cent) as well as Life Insurance Corporation of India (LIC) (30.48 per cent). Even as the process to dilute their respective stakes in IDBI has progressed, the conclusion and eventual finalisation of new stakeholders is still awaited. According to a PTI report, DIPAM Secretary Arunish Chawla, in April, said the government has appointed asset valuers for valuation of IDBI Bank and is also deliberating the share purchase agreement to be signed with a prospective buyer. Meanwhile, according to a Reuters report, the Indian banking regulator is signalling possible rule changes ahead that would let foreigners own more of India's banks, spurred by overseas institutions' eagerness for acquisitions and the fast-growing economy's need for more long-term capita. IDBI Bank results For the January to March 2025 quarter (Q4FY25), IDBI Bank reported a 26 per cent year-on-year (Y-o-Y) increase in net profit at ₹2,051 crore, compared to ₹1,628 crore in Q4FY24. However, Net Interest Income (NII) declined by 11 per cent Y-o-Y to ₹3,290 crore from ₹3,688 crore last year. The bank showed improvements in asset quality with Gross Non-Performing Assets (GNPA) dropping to 2.98 per cent, down from 3.57 per cent in the December 2024 quarter (Q3FY25), while Net NPA declined to 0.15 per cent from 0.18 per cent. Apart from the steady growth in advances and the consequent improvement in its core income and profit, IDBI Bank continues to benefit from the recoveries from significantly provisioned stressed assets. The operating profitability is supported by strong recoveries from written-off accounts while credit and other provisions also remained low, supporting the overall profitability. The bank has a significant pool of highly provisioned stressed assets, which is likely to support its core profitability. "Though the capitalisation profile was supported by capital infusion in the past by LIC and the GoI, IDBI Bank has remained profitable since FY21. Notwithstanding the sufficient internal accruals and capital position for growth, the Reserve Bank of India's (RBI's) implementation of the expected credit loss (ECL) framework for credit exposures and additional provisioning on infrastructure financing remain monitorable," rating agency Icra said in January 2025. However, the strong capital cushions provide support for such transition(s). Although the ratings are based on IDBI's stand alone credit profile, any change in its parentage will be monitorable, it added. About IDBI Bank IDBI Bank, founded in 1964, is a private sector bank headquartered in Mumbai. It was a public sector bank till February 2019 with the GoI holding a majority stake. In January 2019, LIC increased its stake in the bank to 51 per cent by infusing capital of ₹21,624 crore, resulting in the dilution of the GoI's ownership to 46.46 per cent as on January 24, 2019 from 85.96 per cent. LIC maintained its holding at 51 per cent during the subsequent capital raise of ₹9,300 crore in September 2020, while the GoI's share remained at a similar level of 47.11 per cent. However, LIC and the GoI's stakes in the bank declined to 49.24 per cent and 45.48 per cent, respectively, after it raised capital via a qualified institutional placement (QIP) in FY2021. Given the decline in the GoI's majority shareholding, the Reserve Bank of India (RBI) classified IDBI as a private sector bank w.e.f. March 2019.
Business Standard
20-05-2025
- Business
- Business Standard
NLC India gains as Q4 PAT zooms 322% YoY to Rs 482 cr
NLC India rallied 3.91% to Rs 245.60 after its consolidated net profit zoomed 321.83% to Rs 481.96 crore on 8.34% increase in revenue from operations to Rs 3,836 crore in Q4 FY25 over Q4 FY24. Profit before tax spiked 451.37% to Rs 912.08 crore in Q4 FY25 as against Rs 165.42 crore in Q4 FY24. Total expenses added 7.79% year on year to Rs 3,600 crore in the quarter ended 31 March 2025. Employee benefits expense stood at Rs 1,093.59 (up 57.43%YoY), finance cost was at Rs 325.30 crore (up 63.36%) and cost of fuel consumed stood at Rs 514.07 crore (up 25.06% YoY) during the period under review. Revenue from Mining segment declined 8.22% to Rs 1,962.94 crore in Q4 FY25 as against Rs 2,138.87 crore in Q4 FY24. Revenue from Power Genartion segment rallied 9.49% to Rs 3,263.38 crore in Q4 FY25 from Rs 2,980.32 crore in Q4 FY24. Meanwhile, the board of directors has recommended a final dividend of Rs 1.50 per equity share) for the financial year 2024-25, subject to audit by the comptroller and auditor general of india (c&ag) and approval of the shareholders at the ensuing annual general meeting (AGM). The details regarding the Book Closure / Record Date for determining the entitlement of shareholders to the Final Dividend, and the date of payment/disptach of the said dividend, will be announced in due course upon finalization of the AGM date. Further, the company has approved the incorporation of a joint venture company with Rajasthan Rajya Vidyut Utpadan Nigam (RVUNL), with equity participation in the ratio of 74:26 (company:RVUNL), for the purpose of establishing, maintaining, and operating a 3 x 125 MW Lignite-based Thermal Power Station. The Joint Venture will also develop and operate lignite mines to meet the fuel requirements of the proposed Thermal Power Plant. The incorporation is subject to compliance with DIPAM guidelines and receipt of necessary approvals from the Ministry of Coal (MoC) and other relevant departments, as applicable. NLC India is a 'Navratna' government of India company in the fossil fuel mining sector in India and thermal power generation. As of 31 March 2025, the Government of India held a 72.20% stake in the company.
