INSUBCONTINENT EXCLUSIVE:
ET Intelligence Group: Fiscal deficit higher than budgeted may prompt government to push PSUs for buybacks or higher dividends.
The gap
between government expenditure and revenues at end of November stood at Rs 6.48 lakh crore against budgeted Rs 6.24 lakh crore (3.3 per cent
Going by fiscal trend and latest data points, it looks highly likely that deficit could be breached.
NMDC, NHPC, Oil India, BHEL, NALCO,
NLC, Cochin Shipyard, KIOCL and ONGC have already announced buybacks
IOC recently announced (December end) an interim dividend
On day of announcement, stock traded at a dividend yield of 5 per cent.
There could be more buybacks or dividends in pipeline, allowing
investors to make good returns on dividends and buybacks in current volatile markets.
Based on cash reserves and debt and dividend/buyback
history of PSUs, ETIG has identified more PSUs that could announce dividends or buybacks soon.
Coal India, HAL, RITES, NBCC, Engineers
India, NBCC and MOIL have given interim dividends, but final dividends could be huge from these companies
The gains may vary on amount of cash these PSUs give out.
