PSU Dividends - Probably next place of action: SMC Global

PSU Dividends - Probably next place of action, says Jagannadham Thunuguntla, Strategist & Head of Research, SMC Global Securities Limited.

1. In the recent past, the major issue that is on the radar of the government is "Fiscal Deficit" management. 2. The government has made several attempts such as PSU disinvestment and PSU buyback programs to increase the revenue collection helping the "fiscal deficit" management. 3. However, many of these efforts have not yielded the kind of results that are originally anticipated. Naturally, the government
has to find new ways to augment the revenues. 4. One such way is increasing the "Dividend" receipts from PSUs. In that backdrop, an effort is made in this report to see the
dividends given by PSUs to the government in the past 2 years. 5. For the financial year 2010-11, the aggregate dividend given by PSUs to the government is to the tune of about Rs 26,057
Crores. During the last financial year, the largest dividend to government came from ONGC to the tune of Rs 5,550 Crores. 6. There are about 7 PSUs who have given dividend of more than Rs 1000 Crores to government, during the financial year 2010-11. That is, ONGC, NTPC, Coal India, IOC, NMDC, SBI and BHEL. 7. Again for the current financial year of 2011-12, these large PSUs assume additional significance, as government may be
"expecting" larger dividend from them. 8. For the investors who seek "dividend yield", it may be interesting time to keep these PSUs in the radar. Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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