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Since 1st March, 1999
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SCI declares 170% interim dividend

Mumbai, Oct. 3: The Shipping Corporation of India (SCI) today proposed a 170 per cent interim dividend for its shareholders.

The windfall will benefit the government, as it holds a majority stake in the company, which is slated for divestment.

The SCI board of directors informed the bourses today that the company has resolved to give to the shareholders a special interim dividend of Rs 17 per share, that is 170 per cent on the equity capital.

“The dividend will be payable upon receipt of an approval from the Centre under the provisions of the Companies Act 1956,” the company said. Following the announcement, the SCI scrip jumped 27.04 per cent to close at Rs 140.95. Other PSU scrips joined in anticipation of similar announcements.

Analysts tracking the government companies say with a delay in the divestment of government equity in Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd, the government will eye similar dividends from PSUs to compensate the Rs 13,000 crore earmarked from divestment proceeds.

Oil and Natural Gas Corporation has already declared a 300 per cent dividend amounting to over Rs 4200 crore. “The government owns some profitable enterprises and collects substantial dividends and share in profits from these entities,” says J M Morgan Stanley in a research report.

According to the report, in 2001-02, the government had collected Rs 6970 crore as dividend. The government budget estimates that dividend paid rose more than 40 per cent to Rs 9900 crore in 2002-03.

“Hypothetically, if the dividend payout is raised to 80 per cent, the government's enterprises can pay an annual dividend of Rs 23000 crore,” J M Morgan Stanley said.

The increased payouts will help the government to compensate the botched divestment deals expected in the current financial year. Among the PSU companies raking in profits are Indian Oil, HPCL, BPCL and ONGC.

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