State-owned fuel retailers IOC, BPCL and HPCL will go in for increased borrowings to sustain high dividend payments and capital spending this fiscal, keeping their credit metrics weak, Moody’s Investors Service said today.
It expected dividend payments by the three to decline modestly in 2017-18, but remain higher than in 2015-16.
The government expects to receive Rs 67,500 crore of dividends from all state-owned companies in 2017-18, less than the Rs 77,000 crore estimated to have been received in 2016-17 but more than double the Rs 30,800 crore in 2015-16.
“If we assume the three companies reduce the dividend in the same proportion as per the government’s expectations, they will pay a combined Rs 20,600 crore in dividends (including distribution taxes), lower than Rs 23,700 crore paid in fiscal 2017 but significantly higher than Rs 8,500 crore paid in fiscal 2016,” it said. Read More…