As govt asks cash-rich PSUs to cough up money, IOC relents, ONGC to follow

New Delhi: In a major step to help the government meet its tax revenue target, state-run Indian Oil Corp (IOC) has announced a second interim dividend of Rs 1,412 crore for 2018-19 while Oil and Natural Gas Corp (ONGC) agreed to do so next week. India’s biggest oil firm, IOC, in a stock exchange filing, announced that its board has accepted the payment of Rs 1.50 per share of 15 percent in 2nd interim dividend for this financial year 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," IOC said in the filing.

Govt stands to make Rs 761 crore

The government, with 53.88 percent stake in IOC, stands to earn nearly Rs 761 crore, not including dividend distribution tax. ONGC said a board meeting has been convened on March 23 to evaluate and announce an interim dividend even though it had initially resisted a government demand for a second interim dividend.

ONGC had initially resisted paying a 2nd interim dividend since it did not have surplus cash to make such payments within a month of an interim dividend payout, sources said. Coal India Ltd declared a 2nd interim dividend of Rs 5.85 per share on March 14. The government stands to get Rs 2,647 crore, excluding dividend tax, since it owns 72.91 percent stake in CIL. The Centre has been tapping cash-rich PSUs for 2nd interim dividend since it is finding it tough to meet a revised fiscal deficit target. The government is struggling with a possible Rs 80,000 crore shortfall in direct and indirect tax revenues.