New Delhi: The Center on Wednesday called for mutual fund managers to increase their exposition to state enterprises and quote their strong dividend performance and role in the fair division of wealth.
“We recommend that you include fund managers in their portfolios that they include public sector shares so that ordinary investors, seniors, and minority shareholders can deploy their savings productively,” said Arunish Chawla, Ministry of Investment and Public Asset Administration (DIPAM), media briefing.
“While the market limit of public sector enterprises is only 10% of the total market capitalization, they distributed about 25% of total dividends,” he added.
He said state companies made a record £1.5 trillion ($ 17.3 billion) in dividends in FY2024-25. For FY2025-26 the government expects to receive £69,000 crore in dividends from state -owned enterprises.
Chawla is scheduled to visit bomba next week to meet the best fund administrators and introduce government perspective.
“We will also suppress private corporations to declare fair dividends for their minority shareholders so that our stock market can be sufficient for more inclusive and rewarding space for a joint investor,” he said.
Also read: Three Banks of the Public Sector may put a government share on sale in FY26
IDBI Bank Divestment
Chawla, which spoke about the strategic sale of the government’s share in IDBI bank, said the center was going forward with its decision and at the same time proceeding to work on several other fronts.
He noted that a virtual data room has been established and the process of resolution of queries proceeds smoothly.
Asset evaluators have been appointed for sale and more valuation methodologies are examined.
He added that there is currently a discussion on the purchase contract and the financial offers will be invited in the appropriate phase.
The Indian Government and Life Insurance Corporation (LIC) have a 94.72% share in IDBI Bank. LIC holds a 49.24% stake and the government 45.48% for the creditor.
Center and Lic are planning to sell 61% of IDBI bank, while the government sold 30.48% and 30.24% of shares.
While Chawla refrained the time of the timeline for the strategic sale of IDBI Bank, it indicated that it is expected that FY26 will be closed after delay for various reasons in the last few years.
“We are proceeding forward with the decision to sell IDBI and we are also working on several other fronts (with regard to sale and offer for sale),” he said.
While the sale is a partial or full disposal of a business unit through sales, the offer for sale (OFS) is a mechanism where existing shareholders, including promoters, sell their shares to the public.
The IDBI selling transaction, which was originally closed at the end of FY24, was delayed due to the problems of appreciation, regulatory obstacles and prolonged proper care of the applicant.
“There are almost half a dozen strategic selling in the pipeline,” Chawla added without elaborating.
On 2 February Mint reported that the government was considering strategic sale of its share in eight companies, including IDBI Bank LTD, Beml LTD, Shipping Corp. of India Ltd, Hll LifeCare LTD, Projects & Development India Ltd, Indian Medicine Pharmaceutical Corp. Ltd and Ferro Scrap Nigam Ltd.
The government recalibrates its strategy for aggressive payouts of dividend and monetization of assets, Chawla said. “In the future, we will continue to share the wealth of companies with minority investors,” he added.
(Tagstotranslate) PSU Stocks Dividends (T) Indian payments of PSU shares
