PUBLIC sector firms may be working hard to shore up profits in the wake of strong macroeconomic headwinds,but the government seems to be quietly prodding them to step up dividend payouts. Compared to the previous fiscal,the governments earning in the form of dividends from the top 15 public sector undertakings (PSUs) is set to increase by 19 per cent in the 2011-12 financial year (FY12). Thats sharply higher than the 15 per cent rise in aggregate net profits recorded by these firms during the same period. Data collated by The Indian Express (based on the final dividend recommended by the board of the companies) reveal that the dividend earnings from top 15 PSUs in FY12 stood at Rs 23,748 crore as against Rs 19,996 crore earned from the same companies in FY11,a jump of 18.8 per cent. However,the aggregate net profit of the group of companies rose by 14.7 per cent in the same period,the data shows. Market participants say a clear message has been passed on to the companies to announce higher dividends because it would help the government meet its revenue shortfall,coming at a time when the stock markets have generated weak returns and have pretty much shut out the primary market route for increasing funds. Its a good move because companies with high cash reserves and generating more cash can afford to pay out higher dividends and,in this manner,even the minority shareholders benefit in a weak stock market environment, said a top official with a leading investment banking and brokerage firm. There were others who seconded the opinion. There are not many projects coming for PSUs and if you are not losing out money for requirement of capital expenditure then it is good to give some to the shareholders, said the investment banking head of a global financial services firm. ONGC contributed the maximum amount in the governments dividend earnings as its payout for FY12 is set to hit Rs 6,100 crore,though the governments holding in the company came down from 74.14 per cent to 69.23 per cent in March 2012. Its total dividend payout for the year is up by 10 per cent from Rs 7,486 crore to Rs 8,342 crore. In case of Coal India,while the net profit jumped by 71.7 per cent in FY12,the total dividend payout has risen by 156 per cent from Rs 2,463 crore in FY11 to Rs 6,316 crore. Since the government holds 90 per cent stake in the company,its share in the payout amounts to Rs 5,684 crore - up from Rs 2,217 crore in FY11. Companies such as GAIL,NMDC and Oil India have announced higher dividend payouts than their profit growth. GAIL,for instance,recorded a 2.6 per cent rise in net profit in FY12 ,but its payout stood at 16 per cent. In case of BHEL,Powergrid and GAIL,the dividend paid has increased over the past year,though their cash reserves have gone down. Data shows the total cash component of nine companies on the list has gone up by only 2 per cent - from Rs 140,064 crore in FY11 to Rs 142,893 crore in FY12.
