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DIPAM introduced new dividend guidelines requiring CPSEs to distribute at least 30% of PAT or 4% of net worth annually. Financial CPSEs must comply too, encouraging better profitability and shareholder returns.
The Department of Investment and Public Asset Management (DIPAM) has announced updated dividend guidelines for Central Public Sector Enterprises (CPSEs). Effective from FY 2024-25, CPSEs must pay a minimum annual dividend of 30% of their profit after tax (PAT) or 4% of their net worth, whichever is higher. The revised rules aim to enhance shareholder value, improve CPSE efficiency, and optimise capital management.
Minimum annual dividend: 30% of PAT or 4% of net worth (whichever is higher).
Financial CPSEs like NBFCs to follow the same 30% PAT rule.
Interim dividends mandated every quarter or twice a year for listed CPSEs.
Listed CPSEs to pay at least 90% of expected annual dividends as interim payments.
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The new guidelines also address share buybacks and splitting to maximise CPSE efficiency. CPSEs with a market price below their book value for six months and at least ₹3,000 crore in net worth may consider buybacks if cash reserves exceed ₹1,500 crore.
Listed CPSEs with market prices exceeding 150 times the face value for six months may opt for share splits, subject to a three-year cooling-off period.
Key Action | Requirement |
Buyback Eligibility | ₹3,000 crore net worth, ₹1,500 crore reserves |
Share Split | Market price >150 times face value for 6 months |
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CPSEs will be encouraged to issue interim dividends more frequently. Listed entities must ensure that at least 90% of their projected annual dividend is distributed as interim payments. The remaining amount will follow as final dividends after the Annual General Meeting.
The Committee for Monitoring of Capital Management and Dividend by CPSEs (CMCDC), chaired by the Secretary of DIPAM, will oversee all capital-related matters. Subsidiaries with over 51% government ownership will also comply with these rules.
DIPAM’s updated dividend and capital management policies are expected to drive better returns for shareholders and improve operational efficiency, making the DIPAM share price a focal point for investors. These reforms provide enhanced financial flexibility, ensuring CPSEs align with market expectations.
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