PSUs dividend payout gets a crude shock

Written by Pradip Kumar Dey | Mumbai, Jun 18 | Updated: Jun 20 2008, 03:12am hrs
Rising oil prices, their control and rising input costs could have taken toll on the governments coffers in more than one way. A study by FE of 33 public sector undertakings reveals that the dividend payout has decreased 8.6% during FY08 to touch Rs 8,042 crore, down from Rs 8,798 crore in FY07. The coffers would be lighter by Rs 756 crore.

And this is despite the fact that these companies recording a 11.4% growth in the net earnings during the same period. The analysis reveals that the aggregate net profit of the sample rose to Rs 43,701 crore in FY08 from Rs 39,217 crore during FY07. "Apart from the oil companies, many have been ploughing back their profits to fund further expansions," reasons an analyst with a leading brokerage.

The biggest decline in payouts were noticed in the case of oil marketing companies, that had to bear the brunt of global rising oil prices and controlled product prices.

The dividend pay out by

HPCL to government decreased from Rs 311.54 crore FY07 to Rs 51.92 crore during FY08. This can be explained from the profit performance of the company, its net profit decreased by 27.8% over the previous year to Rs 1134.88 crore during FY08.

Similarly, Indian Oils dividend payout to the centres coffers decreased from Rs 1,820 crore to Rs 527 crore during FY08.The net profit of the company also decreased by 7.1% to Rs 6962.58 crore from Rs 7499.47 crore during the study period.

Earlier, an order was issued by the department of expenditure which said that all profit making PSUs, that are essentially commercial enterprises, should declare a minimum dividend of 20% or a minium dividend payout of 20% of post-tax profits. Here, out of the 33 PSUs, 26 declared more than 20% dividend during the year FY08.

On the basis of the rate of equity dividend, NMDC (385%) topped the list of 33 PSUs followed by Chennai Petro ( 170%) and BHEL (152.55).

Significant amount of dividend pay out to government was registered in the case of Neyveli Lignite.The companys dividend to government increased by 66.7% to Rs 313.93 crore during 2007-08 from the level of Rs 188.36 crore during 2006-07. The companys net profit also increased by 94% to Rs 1101.57 crore during 2007-08.

The top five PSUs,who paid highest amount of dividend to Govt. during 2007-08 are NTPC (Rs 2,583 crore), SAIL(Rs 1,311 crore), Indian Oil(Rs 527 crore),BHEL(Rs 505 crore) and NMDC(Rs 500 crore).Among these top five, highest increase in dividend payment was seen in the case of BHEL (24.5%).