Select PSU shares rally; MMTC, STC India surge over 10%

Hindustan Copper, ITI, Dredging Corporation of India and HMT were up 5%-12% as compared to 0.5% fall in Sensex.

Shares of select public sector undertaking (PSU) companies have rallied by up to 15% on the BSE in an otherwise weak market on the back of heavy volumes.

MMTC (up 15% at Rs 45), State Trading Corporation of India (13% at Rs 104) and Hindustan Copper (12% at Rs 53), ITI (9% at Rs 30), Dredging Corporation of India (8% at Rs 414) and HMT (5% at Rs 43) were up 5%-15% on the BSE. At 10:41 AM, the S&P BSE Sensex was down 0.5% at 26,886 points.

The board of directors of two state-owned mining companies NMDC and MOI on Tuesday approved the buy back shares of up to 25% of their paid-up capital from the shareholders including promoters through tender offer.

According to Business Standard reports, the Centre has released a new set of guidelines on capital restructuring of state-owned companies, which will make them more accountable on matters of dividends, buybacks and bonuses, and will help the government meet its non-tax revenue and capital receipts target for the year.

The guidelines, applicable from April 1, make it mandatory for all central public sector enterprises (CPSEs) to pay a minimum annual dividend of 30 per cent of profit after tax, or five per cent of net worth, whichever is higher. If they cannot, they will have to explain to the ministry concerned if they are constrained by capacity to borrow or if the free cash is being put into capital spending and infrastructure, added report. CLICK HERE TO READ FULL REPORT.