HPCL, GSPC deals to hit oil PSU dividends in FY18 by at least 17%
According to multiple sources, this would mean a cut of about 17 per cent on the dividend collected from petroleum companies, to Rs 145 billion in 2017-18 from Rs 175 billion in 2016-17
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India’s largest hydrocarbon producer, Oil and Natural Gas Corporation (ONGC), has told the government it will not raise the dividend payout for 2017-18.
The reason is that it had to go for two major deals, both on government order. Of acquiring a majority stake in Hindustan Petroleum Corporation (HPCL) and Gujarat State Petroleum Corporation’s (GSPC’s) KG basin gas block.
According to multiple sources, this would mean a cut of about 17 per cent on the dividend collected from petroleum companies, to Rs 145 billion in 2017-18 from Rs 175 billion in 2016-17.
“ONGC has informed the finance ministry that it is not in a position to pay higher dividend and might only be able to maintain last year’s payout ratio,” said a source. Based on this, the government had agreed to restrict the dividend payout to 45 per cent of the company’s net profit.
In this financial year, ONGC had completed the acquisition of an 80 per cent stake in GSPC’s KG basin gas block for Rs 77.4 billion. In January, it bought a 51.1 per cent government stake in HPCL for about Rs 369 billion.
Last year, the government had demanded higher dividend from its three oil marketing companies (OMCs) - Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and HPCL. The reason given was that their earnings and profit had risen in the first half of the financial year.
The reason is that it had to go for two major deals, both on government order. Of acquiring a majority stake in Hindustan Petroleum Corporation (HPCL) and Gujarat State Petroleum Corporation’s (GSPC’s) KG basin gas block.
According to multiple sources, this would mean a cut of about 17 per cent on the dividend collected from petroleum companies, to Rs 145 billion in 2017-18 from Rs 175 billion in 2016-17.
“ONGC has informed the finance ministry that it is not in a position to pay higher dividend and might only be able to maintain last year’s payout ratio,” said a source. Based on this, the government had agreed to restrict the dividend payout to 45 per cent of the company’s net profit.
In this financial year, ONGC had completed the acquisition of an 80 per cent stake in GSPC’s KG basin gas block for Rs 77.4 billion. In January, it bought a 51.1 per cent government stake in HPCL for about Rs 369 billion.
Last year, the government had demanded higher dividend from its three oil marketing companies (OMCs) - Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and HPCL. The reason given was that their earnings and profit had risen in the first half of the financial year.