Dividend receipts from CPSEs likely to cross Budget target

So, even if the disinvestment receipts fall short substantially against the target of `51,000 crore for FY24,  due to likely non-materialisation of big-ticket strategic sales, it won’t alter the Centre’s fiscal math for the year as tax revenues are also on track.

So far in FY24, the Centre has mobilised Rs 13,792 crore dividend from CPSEs, mostly in the energy, infrastructure and commodity sectors — 18% higher than Rs 11,446 crore in the year-ago period.

“Dividend achievement in FY24 will likely exceed the target,” a senior government official told FE.

CPSE dividend receipts under the supervision of the Dipam do not include receipts from state-run financial institutions such as banks and insurance companies.

The Centre’s dividend receipts exceeded the revised estimate (RE) by Rs 16,000 crore or 37% to reach about Rs 59,000 crore in FY23, helping it comfortably bridge the shortfall of Rs 14,706 crore in disinvestment receipts during the year.

Despite the recent hardening of commodity prices, higher earnings by energy and commodity firms will likely boost the dividend receipts from CPSEs in FY24, like in FY22 and FY23.

According to CareEdge, for a sample of 2,076 listed non-finance companies, operating profit rose by 26% (y-o-y) in Q1 FY24 compared to 6% growth in Q4 FY23 as raw material cost moderated.

State-run oil marketing companies’ profit surged to `24,300 crore in Q1FY24 as against loss of `8,300 crore in Q1FY23 due to strong marketing margins. Despite the recent hardening of crude prices, state-run OMCs and upstream Oil and Natural Gas Corporation and Oil India are expected to report robust profits in FY24. These firms pay usually `10,000 crore to `20,000 crore in annual dividends to the Centre except in FY23 as OMCs suffered reported lower profit due to a freeze in retail prices when crude prices surged.    FE