The Centre continues to reap good dividends from the DIPAM issued advisory on ‘Consistent dividend policy’ of November 2020 with the aggregate CPSE dividend payouts surpassing Revised Estimates (RE) on a consistent basis in the last three fiscal years.
Total dividend receipts from Central Public Sector Enterprises (CPSEs) in FY21, FY22 and FY23 stood at ₹39,750 crore, ₹59,294 crore and ₹59,533 crore respectively. These exceed the RE of ₹34,717 crore, ₹46,000 crore and ₹43,000 crore, the Finance Ministry said in the 2023 year-ender on DIPAM.
In the current financial year, the government has realised ₹26,644 crore as dividend receipts from CPSEs as of December 4, 2023.
While the Department of Investment and Public Asset Management (DIPAM) has done well to implement at a consistent dividend policy for CPSEs, it still has some heavy lifting to do on the issue of achieving the disinvestment targets.
Disinvestment receipts
For the current fiscal, the Union Budget had pegged the disinvestment receipts target at ₹51,000 crore. So far till December 13, the disinvestment receipts stood at just ₹10,050 crore.
DIPAM said on Wednesday that it is actively pursuing strategic disinvestment in entities such as IDBI Bank, PDIL, HLL Life Care, NMDC Steel, Shipping Corporation of India and BEML Ltd with expression of interest having been issued for these transactions.
“Disinvestment is an ongoing process, and execution of disinvestment transactions depends upon administrative feasibility, market conditions, domestic and global economic outlook, and investor interest.
“In view of this, it is difficult to anticipate the quantum of annual proceeds from disinvestment during the current fiscal”, Bhagwat Kishanrao Karad told the Lok Sabha in a recent written reply.
OFFER FOR SALE ROUTE
DIPAM said that the offer-for-sale (OFS) route has been actively pursued by the government for divesting its shareholding in CPSEs.
Noteworthy transactions in CPSEs such as HAL, Coal India Limited, RVNL, SJVN Ltd, and HUDCO have collectively yielded ₹10,860.91 crore (HAL ₹2,910.39 crore, Coal India ₹4,185.69 crore, RVNL ₹1,365.61 crore, and SJVN ₹1,349.27 crore, HUDCO ₹ 1,049.95 crore)
The stocks involved generally experienced an uptrend post-OFS, contributing to capital gains for investors, DIPAM added.
One of the key highlights in 2023 was the emphasis on value creation in CPSEs. Since the introduction of the New PSE policy in January 2021, the NSE CPSE and BSE CPSE Indices have surpassed benchmarks, showcasing returns of 160.49 per cent and 128.66 per cent, respectively, until November 2023.
In the realm of initial public offerings, DIPAM successfully launched the IPO for the Indian Renewable Energy Development Agency (IREDA). With IREDA IPO, government has realised ₹858.36 crore as disinvestment receipt. The company has realised approximately ₹1,290 crore through issue of 15 per cent fresh equity.