CORPORATE
Norms for dividend, bonus and share buyback of CPSEs set to be changed
- IBJ Bureau
- Sep 02, 2024
The government is working to amend its 2016 guidelines with regard to dividend payment, bonus issues and share buyback by Central public sector enterprises (CPSEs), officials have said.
The Finance Ministry had in May 2016 issued comprehensive guidelines on capital restructuring of CPSEs in 2016 for efficient management of government investment in CPSEs.
“With the CPSEs now more strong in terms of balance sheet and having improved on their market capitalisation, it is now time for a relook of the capital restructuring guidelines,” an official, who did not wish to be names, has said.
The amended guidelines are expected to be issued by the Finance Ministry soon.
According to the capital restructuring guidelines issues by the Department of Investment and Public Asset Management (DIPAM) in May 2016, CPSEs that do not have plans to deploy their capital optimally for business purposes should have a professional look at the surplus funds available to them.
Every CPSE is required to pay a minimum annual dividend of 30 per cent of PAT or 5 per cent of the net worth. Besides, every CPSE having net worth of at least Rs 2,000 crore and cash and bank balance of over Rs 1,000 crore are required to opt for a share buyback.
Bonus shares are to be issued if the defined reserves and surplus of CPSEs is equal to or more than 10 times of its paid up equity share capital.
Report By
View Reporter News