Gujarat Government Directs PSUs To Declare Higher Dividends, Bonus Shares

The Gujarat government has mandated minimum requirements for dividends, bonus shares, buybacks, and splits for its public sector undertakings.

State PSUs are required to cough up a minimum dividend of at least 30% of profit after tax or 5% of net worth, whichever is higher. The state PSUs with a net worth of at least Rs 2,000 crore and cash and bank balances of Rs 1,000 crore will be required to buyback its shares.

"It is expected that the new policy of compulsory dividends and bonus shares will add to the valuation of Gujarat State PSUs," it said in a resolution on Tuesday.

The PSUs are directed to split shares when the book value of shares exceeds 50 times its value, provided the existing face value of the share is more than Re 1.

The seven listed PSUs in the state are all profit-making companies. They are Gujarat Alkalies and Chemicals Ltd., Gujarat Mineral Development Corp., Gujarat State Fertilisers and Chemicals Ltd., Gujarat Industries Power Co., Gujarat Gas Ltd., Gujarat Narmada Valley Fertilizers and Chemicals Ltd. and Gujarat State Petronet Ltd.

The Union government had come out with similar guidelines for dividends for central PSUs.