After securing a record ₹74,000 crore in dividends from central public sector undertakings (CPSUs) in the previous financial year, the Indian government has called on private companies to ensure equitable dividend distribution to shareholders. The move is aimed at fostering a more inclusive and rewarding stock market for common investors.
Addressing the media on Wednesday, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla highlighted the significant role of CPSUs in dividend distribution. “Although PSUs constitute only 10% of the total market capitalisation, they accounted for nearly 25% of the total dividends distributed,” he said. He emphasized that such performance should encourage private corporations to adopt a fair dividend approach, particularly benefiting minority shareholders.
Chawla reassured investors that the robust dividend payouts did not hinder the capital expenditure plans of the CPSUs. He affirmed that investment targets for the current fiscal year would be met. Stressing the sound financial strategies of CPSUs, he urged mutual fund houses to enhance their investments in these undertakings to boost returns for retail investors. Meetings with fund managers are planned to discuss the government’s dividend and investment strategies, he added.
On the topic of disinvestment, Chawla said the government remains flexible and would tailor its public offerings and stake sales in PSUs according to prevailing market conditions. “Our strategy balances market dynamics with value creation for shareholders,” he noted, mentioning a model his department has developed to ensure optimal returns for all stakeholders.
When questioned about the progress of strategic disinvestments, Chawla declined to provide definitive timelines for the planned sales of companies such as Shipping Corporation and BEML. However, he confirmed that the privatisation of IDBI Bank is progressing. A virtual data room has been established, and the query resolution process is moving forward smoothly. He also informed that asset valuers have been appointed to facilitate the divestment process.
The government’s message comes as it seeks to not only maximise returns from its own holdings but also push for broader corporate responsibility in rewarding investors fairly across the market spectrum.