IOC pays 2nd interim dividend; ONGC to consider on 23 March
NEW DELHI: State-owned Indian Oil Corp (IOC) on Tuesday declared a second interim dividend of ?1,412 crore for the current financial year and ONGC agreed to do so next week to help the government meet its tax revenue target.
In a stock exchange filing, IOC, the nation's biggest oil firm, said its board at a meeting on Tuesday approved payment of ?1.50 per share of 15% in second interim dividend for 2018-19 to shareholders.
"The dividend will be credited to the account of the shareholders or the dividend warrant in respect thereof will be dispatched on or before April 10, 2019," it said.
The government owns 53.88% stake in IOC and stands to get about ?761 crore, excluding dividend distribution tax.
Separately, Oil and Natural Gas Corp (ONGC), which had initially resisted a government demand seeking a second interim dividend, said a board meeting has been convened on March 23 to consider and declare an interim dividend.
Grappling with a possible ?80,000 crore shortfall in direct and indirect tax revenues that will make it difficult to meet a revised fiscal deficit target, the government has been tapping cash-rich PSUs for second interim dividend.
Coal India Ltd on 14 March declared a second interim dividend of ?5.85 per share.
The government holds 72.91% stake in Coal India and stands to get ?2,647 crore, excluding dividend tax.
Initially, ONGC had resisted paying a second interim dividend on grounds that it does not have surplus cash to make such payments within a month of an interim dividend payout, sources with direct knowledge of the development said.
According to regulations, a company cannot declare a second dividend within a month of the previous payout and companies like ONGC would need to seek approval of markets regulator Sebi to make such a payment.
Sources said the government is struggling to meet the revised fiscal deficit target of 3.4 % in view of the shortfall in goods and services tax (GST) collections.
GST shortfall is likely to be around ?30,000-40,000 crore and a similar shortfall is expected in direct tax collections as well, they said.
IOC in December declared ?6.75 per share interim dividend alongside a ?4,435-crore share buyback to help the government meet its revenue targets.
ONGC had announced an interim dividend of ?5.25 per equity share on February 14. It also had approved a ?4,022-crore share buyback.
Last month, while presenting the annual budget for 2019-20, the government had revised upward its fiscal deficit target to 3.4 per cent of gross domestic product (GDP) for the current financial year from the previously estimated 3.3 per cent budgeted target.
In absolute terms, the fiscal deficit, the gap between the Centre's expenditure and revenue, has been pegged at ?6.34 lakh crore for 2018-19.
During the April-January period, fiscal deficit touched ?7.70 lakh crore, or 121.5 per cent of the budgeted target for the current fiscal year ending March 31, government data showed.
For the current fiscal, direct tax collection has been pegged at ?12 lakh crore while the revised estimate for GST collections has been put at ?6.43 lakh crore, which is lower than the targeted ?7.43 lakh crore.