The shares of Gujarat government-run public sector undertakings (PSUs) gained upto 15 per cent in early trade on Wednesday. The buying interest was triggered by the State government’s new policy mandating minimum dividend distribution and bonus issue from the State PSUs.

All the seven listed state PSUs posted gains of 1-15 per cent in early trade with heavy volumes. The benchmark indices traded in the red in the initial trading hour. Nifty 50 was down 48 points (0.28 per cent) to 17,720, while Sensex was down 149.77 points (or 0.25 per cent) at 59,980.8 levels

At 9.50 am, the state PSUs that made heavy gains include Gujarat Industries Power Company Ltd (GIPCL), which was up 15 per cent on NSE at ₹87.30; Gujarat State Fertilizers and Chemicals (GSFC), which quoted at ₹141.60, up 11 per cent; and Gujarat Mineral Development Corporation (GMDC) at ₹144.35, up 8.45 per cent. Gujarat Narmada Valley Fertilizers and Chemicals (GNFC) gained 7 per cent to trade at ₹285, while Gujarat Alkalies and Chemicals Limited (GACL) gained 8 per cent to trade at ₹676.

Gujarat State Petronet Limited (GSPL) traded at ₹285 with gains of over 7 per cent, while city gas distributor Gujarat Gas Limited (GGL) traded at ₹463.30, up nearly 1 per cent from the previous close on NSE.

In its latest regulations, the Gujarat government has mandated minimum requirements for dividends, issue of bonus shares, buybacks and share split for the state PSUs.

The state PSUs have to offer minimum dividend of 30 per cent of profit after tax, or 5 per cent of net worth, whichever is higher.

Every state PSU with at least ₹2,000 crore networth and cash and bank balance of ₹1,000 crore will have to exercise the option of buyback of its own shares.

State PSUs with defined reserves and surplus equal to or more than 10 times its paid-up equity share capital are required to issue bonus shares to shareholders.

Further, the PSUs are mandated to split their shares where the market price or book value of the shares exceeds 50 times its value, provided the existing face value of the share is more than ₹1

The Gujarat government has set up about 100 PSUs in different sectors, tasked with specific objectives.

The new guidelines would apply to all corporate bodies where the government of Gujarat and the government-controlled body corporate have controlling interest.

The guidelines are meant to comprehensively address the capital restructuring needs of PSUs, a State government statement mentioned.

Notably, the Centre has similar guidelines for dividends for Central PSUs.