StatsGuru: PSUs serve govt better with dividends than disinvestment

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Once again, the Union government is looking to public-sector undertakings, or PSUs, to help meet its revenue requirements - whether through disinvestment or dividends. These companies largely had a good run on the stock market in 2014. As Table 1 shows, most major PSU stocks saw great returns over the year. The two power PSUs - NTPC and NHPC - though, were an exception. Table 2 shows PSUs, in fact, outperformed the Sensex in 2014. But, as Table 3 notes, these stocks' performance over a five-year period has not been as good as the Sensex's. Many PSUs have solid cash reserves, as Table 4 shows, and several are also making notable profits after tax, visible in Table 5. Perhaps this is why they have in recent years been perceived by the government as possible sources of helpful dividends, as is clearly noticeable in Table 6. However, when it comes to disinvestment, the receipt has met the Budget target only once in the past decade - during 2003-04. It so far appears the government's revenue receipt from disinvestment as a percentage of Budget target is going to be the smallest ever.