CPSEs will now have to pay 4% of their net worth as dividend, as compared to 5% earlier.
For PSU NBFCs, the net worth criterion has been dropped but the 30% of net profit norm for minimum annual dividend remains.
PSUs looking to carry out a buyback of euqity shares will now need to have a networth of ₹3,000 crore, compared to the ₹2,000 crore rule set in 2016. The cash reserve requirement for carrying out share buybacks has also been increased to ₹1,500 crore from ₹1,000 crore earlier.
In order to issue bonus shares, the PSU’s reserves and surplus requirement has been doubled to 20 times its paid up equity capital, compared to 10 times in 2016.
State-run companies planning a stock split will now need to ensure that their market price is 150 times the face value of their equity share, compared to 50 times in 2016. Additionally, there also has to be a mandatory gap of three years before two stock splits for these PSUs, according to the new norms.
Companies like Mazagon Dock recently approved a split of its equity share, where it will divide one share with a face value of ₹10 into two shares with a face value of ₹5 each.
Stocks like NMDC also announced a bonus issue of shares along with their September quarter results recently, where the board approved the issue of two free shares for every one share held. This was the first bonus issue announced by NMDC after 2008.
(Edited by : Hormaz Fatakia)
