Financial Daily from THE HINDU group of publications
Wednesday, Aug 27, 2003
Industry & Economy - Disinvestment
Nitish Kumar rules out Railway PSUs sell-off
New Delhi , Aug. 26
THE Railways Minister, Mr Nitish Kumar, has ruled out disinvestment of companies such as RITES, IRCON and CONCOR that are under his Ministry.
"As of now, the Government has decided to keep Railway public sector undertakings (PSUs) out of the disinvestment process. All Railway PSUs are doing extremely well and there is no need to consider their divestment," Mr Kumar said at the inauguration of the corporate office of Rites Ltd at Gurgaon last evening.
The Minister, while lauding the company's performance, said that RITES should work out a mechanism to pay higher dividend to the Government.
"As the equity base of the company is very small (Rs 2 crore), the dividend as a percentage looks high, but does not translate into any significant amount of money for the Government. RITES should evolve a mechanism to improve the quantum of payment," Mr Kumar said.
RITES has announced a 125 per cent dividend in addition to an equal amount already paid earlier in the year. The total dividend paid by the fully-owned Railway subsidiary to the Government would amount to Rs 5 crore, taking into account both the tranches.
The Minister, however, did not specify how RITES could part with a higher amount as dividend. To ensure a higher dividend, the equity base of the company will have to be expanded.
Company officials said there was no plan under consideration, as of now, to increase the equity by either listing in the market or issue of fresh shares to the Railways. But RITES would take up the issue internally and work out a solution, they said.
Earlier, RITES announced a turnover of Rs 322 crore for 2002-03, 14 per cent higher than the Rs 283 crore in the previous year. The turnover includes a sum of Rs 53 crore which came from settlement of payment for projects executed earlier in Iraq.
The company's turnover from consultancy fee has grown by 35 per cent to Rs 162 crore in the domestic segment and by 21 per cent to Rs 48 crore in the international segment.
RITES earned a pre-tax profit of Rs 100 crore during the year and its net profit after tax rose to Rs 54.4 crore against Rs 39.1 crore of last year.
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