Gujarat government on Tuesday announced a new policy for minimum levels of dividend distribution and bonus shares for its state public sector undertakings including listed companies.With this new policy of compulsory dividends and bonus shares, the state aims to add to the valuation of Gujarat states’ PSUs. All 7 listed PSUs of Gujarat are making profits.The state has mandated a minimum of 30 percent of profit after tax or 5 percent of net worth, whichever is higher to be a minimum level of dividend declared for shareholders. However, only the minimum level and maximum permissible level of dividend should be declared.Also Read: Radico Khaitan approaches CCI alleging cartelisation by large liquor companiesFor the buyback of shares, every state PSU having a net worth of at least Rs 2,000 crore and cash and bank balance of Rs 1,000 crore have been mandated to exercise the option to buy back their own shares.In the case of 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.In the case of splitting of shares, Gujarat has mandated 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.Also Read: With FAME subsidies on hold, EV companies consider selling stake
