Pay fairer: Govt nudges pvt sector as PSUs give record returns to investors
With public sector enterprises paying record dividends to common investors in the financial year 2024-25, the government on Wednesday nudged private companies to follow suit.
Citing a comparison of dividend payouts by 65 listed Central PSEs and top private firms on NIFTY 50, the government today said that despite barely 10 per cent of the overall market capitalisation, central firms distributed nearly 25 per cent of the overall dividends in FY2025.
The CPSEs distributed a record dividend of Rs 1.50 lakh crore, of which the government share was Rs 74,016 crore, the highest ever.
Flagging hard evidence on value creation through PSUs, Department of Investment and Public Asset Management (DIPAM) Secretary Anurish Chawla today said fund managers should include PSU stocks in their portfolios.
Top 10 PSU contributors to govt kitty
PSU Contribution
Coal India Rs 1,00,252 crore
Oil and Natural Gas Corporation Rs 10,001 crore
Indian Oil Corporation Rs 5,090 crore
Power Grid Corporation Rs 4,824.59 crore
National Thermal Power Corporation Rs 4,088 crore
Telecom Consultants India Ltd Rs 3,761.50 crore
Hindustan Zinc Rs 3,619.06 crore
Bharat Petroleum Rs 3,562.47 crore
Power Finance Corporation Rs 3,002.78 crore
Indian Railway Finance Corporation Rs 2595.88 crore
Airport Authority of India Rs 1,595.39 crore
Total govt dividend receipts in FY25: 74,601
Chawla will soon meet mutual fund managers to make this point for ordinary investors to have an expanded basket of investment choices.
“The CPSEs have distributed record dividends in the financial year closing March 31, 2025, which amounts to Rs 1.5 lakh crore," Chawla said citing DIPAM data.
He said fund managers should include public sector stocks in their portfolios so that common investors, senior citizens and minority stakeholders could deploy their savings productively and partake in the value created by public sector firms.
“We will also nudge private firms to declare fair dividends to their minority stakeholders so that together we can make our share markets a better place for the common investors," said Chawla.
The government share in overall dividend payouts by central PSEs has more than doubled over a decade — from Rs 31,691 crore in 2014-15 to Rs 74,016.68 crore in 2024-25.
Private corporates, meanwhile, paid 10 per cent lower dividends to minority shareholders in FY2024-25 as compared to public sector firms.
An analysis by the DIPAM shows PSUs offered more stable and potentially better dividend payouts relative to earnings (median 0.33) while NIFTY 50 companies displayed a lower paying tendency (median 0.24) — a gap of 10 per cent.
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