Looks like Gujarat PSUs are dominating the list of gainers today! All the seven PSUs listed in the State – GMDC, GACL, GSFC, Gujarat Gas, Gujarat Industries Power, GNFC and Gujarat State Petronet are ruling the roost. GSFC is the top gainer, rising 11.5% to Rs.142.45. GACL rose 10.5% to Rs.692.80, GMDC rose 10% to Rs.146.80.
The stocks rose after the Gujarat government issued a compulsory requirement these PSUs to declare a minimum dividend, bonus shares, buybacks and splits.
The rules mandated:
Dividend - Minimum of 30% of profit after tax or 5 percent of net worth, whichever is higher to be a minimum level of dividend declared for shareholders. Only the minimum level and maximum permissible level of dividend should be declared.
Buyback - every state PSU, having a net worth of at least Rs 2,000 crore and cash and bank balance of Rs 1,000 crore to exercise the option to buy back their own shares.
Bonus shares - state PSUs that have defined reserve and surplus equal to or more than 10 times their paid-up equity share capital are required to issue bonus shares to their shareholders.
Splitting of shares - where the market price or book value of state PSUs’ shares exceeds 50 times of its value, provided its existing face value of a share is more than Rs 1.