Impact of MoU on financial performance of public sector enterprises in India

Gupta, Seema; Jain, Poonam; Yadav, Surendra S.

doi:10.1108/09727981111175984

Cited by 18 publications

(10 citation statements)

References 16 publications

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“…This MoU system was conceived as an instrument to quantify/assess social and commercial obligations/ performance of central government-owned PSUs, known as Central Public Sector Enterprises (CPSE). Gupta et al (2011) measure the financial performance of the CPSEs that had signed an MoU and to compare their performance with CPSEs which have not opted for MoU (referred to as non-MoU PSEs) over a period of 13 years. They measure financial performance of CPSEs based on 15 ratios pertaining to the profitability, efficiency, liquidity and solvency.…”

Section: Corporate Governance In Soementioning

confidence: 99%

Corporate Governance, Institutional Ownership and Firm Performance in Indian State-owned Enterprises

Subramanian

2015

Asia-Pacific Journal of Management Research and Innovation

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Corporate governance norms were prepared with the assumption that the companies are controlled by private players. However, countries such as India also have listed firms that are majority owned by the state/government. The literature on corporate governance has highlighted the differences in the governance practices of the state-owned enterprises and private-owned enterprises. This article analyses the relationship between corporate governance practices of listed state-owned enterprises in India with institutional ownership and the firm performance. The article measures the corporate governance practices of the listed Indian state-owned firms through a standard instrument to arrive at corporate governance scores. The article first analyses the relationship of corporate governance scores with the firm performance measured through the profitability parameter. The results indicate that corporate governance and firm performance share a positive relationship, which is in line with the expectations. However, the relationship between corporate governance practices and institutional ownership is negative, indicating that increasing institutional ownership is negatively affecting the corporate governance practices of the state-owned firm. This result calls for further research in this area as it deviates from the results of the studies done in the context of family-owned firms.

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Section: Corporate Governance In Soementioning

confidence: 99%

Corporate Governance, Institutional Ownership and Firm Performance in Indian State-owned Enterprises

Subramanian

2015

Asia-Pacific Journal of Management Research and Innovation

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“…Researchers have observed an increasing preference for non-discounted capital budgeting techniques (Velez and Nieto, 1986;Gupta et al, 2011). Gitman and Forrester (1977) surveyed the level of sophistication used in capital budgeting by leading firms.…”

Section: Capital Budgeting Techniquesmentioning

confidence: 99%

Capital budgeting decisions: evidence from India

Singh

Jain

Yadav

2012

Journal of Advances in Management Research

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Purpose -The purpose of this paper is to understand current practices in capital budgeting (including real options) in Indian companies and provide a normative framework (guidelines) for practitioners (based on our findings and literature reviewed). Design/methodology/approach -A questionnaire survey was administered to 166 non-financial companies of the BSE 200 index. Secondary data were also collated from 2001-2011. Findings -Trends towards sophisticated techniques and sound capital budgeting decisions have continued in India. All sample respondent firms used discounted cash flow (DCF) techniques in conjunction with non-DCF techniques. Internal rate of return (IRR), used by more than three quarters of the sample companies, is favored over net present value (NPV), used by half of the sample companies. Real options are used by half of the sample companies. Permanent (long-term) capital has been used to finance fixed assets (net) and working capital (net).Research limitations/implications -The limitations of the study are that it is country specific and a detailed sectoral analysis of the constituent sectors of the sample companies could have perhaps provided deeper insight into the subject. Practical implications -The findings of this research, decades of teaching experience of the authors and the literature reviewed have been utilized to evaluate current practices and suggest possible improvements in decision making (through a normative framework). Originality/value -The findings show that there still remains a theory-practice gap in the usage of IRR over NPV. The usage of permanent (long-term) capital to fund fixed assets (net) and permanent working capital requirements, although sound, could be an indication of surplus funds which could be used to repay long-term debt or finance more asset building.

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“…In contrast, the financial performance of profit-making PSEs has shown improvement in a majority of the parameters after disinvestment. The result suggests the better performance of profit-making PSEs compared to loss-incurring PSEs (Gupta et al, 2011).…”

Section: Review Of Literaturementioning

confidence: 93%

Financial Performance of Public Enterprises of Nepal

Shrestha¹,

Pokharel²

2021

Patan Pragya

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Public enterprises are established, owned, and managed by the government to run industrial and commercial activities. The objective of the study is to examine the financial status of Public Enterprises (PEs) of Nepal. The study assesses based on some selected profitability indicators for eleven years. One public enterprise from each sector of the total of six sectors of them was selected. Secondary data was used. The sources such as the annual reviews by the Ministry of Finance, the annual report by Nepal Rastra Bank were chosen. This is purely quantitative research. Profitability ratios such as NPR, ROCE, ROE, and OER were employed over the years in analyzing the available financial information. Mean were computed for key analysis. NAC has the highest mean on NPR followed by NOC,DDC, JEMCL, and NEA. The NAC has the best financial status among sample PEs in terms of NPR. The finding suggests that the performance of NOC recorded the highest on ROCE. This is followed by NAC, NEA, JEMCL and DDC.NOC has the highest mean on ROE followed by RBB, NAC, JEMCL, DDC, and NEA. NEA has the highest mean on OER among the sample PEs. This is followed by DDC, NOC, NAC, RBB and JEMCL. NOC has the highest performance in terms of ROCE and ROE. Similarly, NAC has the highest performance on NPR. JEMCL seems to be the highest efficiency and cost-effective in terms of OER.

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Impact of MoU on financial performance of public sector enterprises in India

Cited by 18 publications

References 16 publications

Corporate Governance, Institutional Ownership and Firm Performance in Indian State-owned Enterprises

Corporate Governance, Institutional Ownership and Firm Performance in Indian State-owned Enterprises

Capital budgeting decisions: evidence from India

Financial Performance of Public Enterprises of Nepal

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