New dividend policy to ensure consistent reward to shareholders: DIPAM secy

The government has brought in a new policy for the public sector companies as per which the CPSEs have to pay dividend at least twice a year to reward their shareholders, Department of Investment and Public Asset Management Secretary Tuhin Kanta Pandey said on Wednesday.

"We have announced a consistent dividend policy, therefore dividends are ensured. The dividend policy has been further fine-tuned to say that we need not wait for annual dividend, and we can have as many as four interim dividends in every quarter in some of the companies or maybe twice in a year," Pandey said at Directors' Dialogue Series organised by Institute of Directors.

He said that even in the current financial year several companies have given interim dividends to shareholders.

"So a consistent dividend policy is something that consistently rewards shareholders which include insurance companies, mutual funds," Pandey added.

So far in the current fiscal, the government has received Rs 28,359 crore as dividend from CPSEs.

The secretary said the government has also decided not to go for repeated offerings of the same stock as well as not have equity exchange-traded fund in the markets because of their price overhang concerns.

"We have brought in several changes in the memorandum of understanding (for public sector companies) in terms of criteria," he said.

Going ahead a lot of importance will be given to criteria like asset monetisation plan, return on equity and return on capital, Pandey said.