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BW Explains: Gujarat PSUs Shares Gain Midweek, Here’s Why
On Wednesday, the Gujarat state government announced a new policy for dividend distribution and bonus shares. BW Explains looks at these shares closely
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The shares of the Gujarat based Public sector undertakings saw a spectacular run on Wednesday and all seven listed PSU saw a jump in their share value. Thursday however saw most of them closing on the red mark but market analysts say that these PSU shares will continue to be on a high for a while. Here’s a look at these PSUs and why their stocks are rallying.
Gujarat PSUs That Are Listed
There are seven PSUs in Gujarat that are listed. All these are profit making PSUs. These are Gujarat Alkalies and Chemicals, Gujarat Mineral Development Corp, Gujarat State Fertilisers and Chemicals, Gujarat Industries Power, Gujarat Gas, Gujarat Narmada Valley Fertilisers and Chemicals, and Gujarat State Petronet.
Why Did These Stocks Jump
On Wednesday, the Gujarat state government announced a new policy for dividend distribution and bonus shares. It may be mentioned here that the Gujarat government has mandated minimum requirements for dividends, bonus shares, buybacks, and splits for its public sector undertakings.
A minimum dividend of at least 30 per cent of earnings after tax or 5 per cent of net worth, whichever is higher, is required by the state. In a resolution on Tuesday, the state government mentioned that the minimum and maximum levels of dividends should be declared.
The state PSUs will be required to buy back their shares. These PSUs have a net worth of a minimum of Rs 2,000 crore and cash and bank balances of Rs 1,000 crore,.
A Look At the Stock Prices
Gujarat Alkalies And Chemicals is trading at Rs 692.50 and in the last 5 days it has gained 10.14 per cent. Gujarat Mineral Development Corp is trading at Rs 151.50 and gained 12.98 per cent in the last five days.
Gujarat State Fertilisers and Chemicals is trading at Rs 151.80. It has jumped 30.02 in the last one month. Gujarat Industries Power gained 18.47 per cent in the last 5 days and is trading at Rs 90.45. Gujarat Gas is trading at Rs 455.95. Gujarat Narmada Valley Fertilisers and Chemicals is trading at Rs 577 and in the last 5 days it has gained 8.72 per cent. Gujarat State Petronet is trading at Rs 284 and jumped 7.54 per cent in the last five days.