Under pressure to meet its budgeted dividend target of Rs 52,495 crore for fiscal 2019, the finance ministry has ruled out exemption of dividend payment by PSUs on account of low cash reserves or poor results.
"Some PSUs have written that they are not in a position to give interim dividends and buybacks as they have very low reserves which is required for their capex or their quarterly results have been bad and that they should be allowed to spread the final payout for this financial year to the next fiscal. We have written back to them that this is not possible, they have to adhere to the interim dividend payout roadmap,” official sources said.
The ministry has already told top performing and profit making PSUs –— IOC, Coal India, ONGC, HPCL, BPCL, REC, PGCIL, Mangalore Refinery and Petrochemicals, NTPC, Nalco, OIL, NBCC and Power Finance Corporation among others to fall in line on interim dividends.
In order to meet its disinvestment target of Rs 80,000 crore for financial year 2018-2019, the BJP-led NDA regime is also expecting PSUs to go for buybacks to boost its revenues.
Downstream crude explorer ONGC has sought an exemption from dividend payout this year to the final dividend payout next fiscal as it opts to buy back government shares but it is not willing to go for both. ONGC will have to buy back 3% of the government's shares in the company, for which it needs Rs 4,826 crore. In the last financial year, the PSU had paid interim dividend twice, amounting to Rs 6,736 crore.
Only PSUs with less than Rs 500 crore turnover and having capex to meet and those that have not had good quarters and have extremely low reserves would be dealt with favourably but with the warning that they be ready for final dividend, if not interim.