Coronavirus impact | Govt wants PSUs to hike dividends, share buybacks: Report
According to the government, CPSEs have cash reserves since their capital expenditure was lower than expected
May 28, 2020 / 03:45 PM IST
Amid the COVID-19 outbreak, the Centre may ask state-run firms to hike dividend payouts and share buybacks.
The central government is taking stock of the cash situation at central public sector enterprises (CPSEs), according to a report by the Business Standard.
The move is an attempt to compensate for a shortfall in the FY21 revenue collection by increasing the income from sources such as taxes and divestment, the report said.
Moneycontrol could not independently verify the story.
According to the government, CPSEs have cash reserves since their capital expenditure was lower than expected, Business Standard reported.
"We are talking with CPSEs to assess their financial status, the amount of cash reserves they have, and the state of their balance sheets," a government official told the publication.
In FY20, three CPSEs repurchased shares worth Rs 821.8 crore from the Centre, which made up 1.6 percent of the divestment proceeds.
Since there is uncertainty around major divestment plans, such as stake sales in Air India and Bharat Petroleum (BPCL), most of the government's divestment proceeds could come through share buybacks, the report said.
"Economic activity is low, so PSUs have had to recalibrate their capex plans. We have told them to assess how much they want to keep aside for contingency, how much can be used up this year, and how much can be given to the government. They are doing that exercise" an official told the paper.