Dipam Secy asks MFs to Include More PSU Stocks

New Delhi: Private sector companies should pay ‘fair’ dividend to their shareholders, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said on Wednesday, as he also nudged mutual funds to increase the share of public-sector enterprises in their portfolio. As per the government’s dividend policy, public-sector companies are mandated to pay a minimum annual dividend of 30 per cent of their net profit in a fiscal. However, there is no such set rule for private sector corporates and their annual dividend payout is around 20 per cent on average.

Chawla, who took charge of the DIPAM in January, would be travelling to Mumbai soon to meet top mutual fund houses, highlight the ‘value creation strategy’ adopted by CPSEs and pitch for increasing the share of CPSE stocks in portfolio. The dividend payout by CPSEs (central public sector enterprises) was at an all-time high of Rs1.50 lakh crore in 2024-25 and the government wants that the common man also reaps the benefit of better corporate performance in the form of dividend, the secretary said.

According to data, although 65 listed central PSEs account for 10 per cent of the total market capitalisation, they account for about 25 per cent of the overall dividend payout.

“We would suggest to fund managers to include PSU stocks in their portfolios so that common investors, senior citizens and minority shareholders can partake in value created by CPSE,” Chawla told reporters here.

He also nudged private sector companies to declare fair dividends to their minority shareholders. “We would also nudge private corporates to declare fair dividends to their minority shareholders so that together, we can make share market a better place for the common man,” Chawla added. CPSEs on the other hand have been paying higher dividend which rose from Rs1.05 lakh crore in 2022-23 to Rs1.23 lakh crore in 2023-24 and Rs1.50 lakh crore in FY25. During 2022-23, CPSEs paid Rs59,533 crore dividend to the government, which went up to Rs63,748 crore in FY24 and Rs74,016.68 crore in FY25.