The State Government of Gujarat has mandated a minimum of 30% of profit after tax or 5% of net worth, whichever is higher to be a minimum level of dividend declared for shareholders. However, only the minimum level and maximum permissible level of dividend should be declared.

For the buyback of shares, every state PSU having a net worth of at least Rs 2,000 crore and cash and bank balance of Rs 1,000 crore have been mandated to exercise the option to buy back their own shares.

In the case of bonus shares, state PSUs which have defined reserve and surplus equal to or more than 10 times of its paid-up equity share capital are required to issue bonus shares to its shareholders.

For a stock split, the state government has mandated splitting shares where the market price or book value of state PSUs' shares exceeds 50 times of its value, provided its existing face value of a share is more than Rs 1.

"It is expected that this new policy of compulsory dividends and bonus shares will add to the valuation of Gujarat State PSUs," it said in a resolution on Tuesday.