Guj PSEs lose Rs 1,100cr in a day

Gandhinagar: Listed PSE companies from Gujarat took a huge beating on the bourses as investors sold heavily in these stocks, following the state government's logic-defying 'request' to these entities to set aside 30% of their profit before tax (PBT) for social causes. 

    In a single day, the market capitalisation of Gujarat Mineral Development Corp (GMDC), Gujarat Alkalies and Chemicals (GACL), Gujarat State Fertlisers and Chemicals (GSFC), Gujarat Narmada Valley Fertilisers Corp (GNFC), Gujarat Industrial Power Corp (GIPCL) and Gujarat State Petronet (GSPL) fell by Rs 1,097 crore. 
    More importantly, the value of government's holding in these companies was shaved off by Rs 590 crore in a single day. GMDC, which has already declared in its annual report it would contribute nearly Rs 123 crore for social causes, suffered a huge loss. Only GSPL could hold on to slender gains on a day the sensex fell by around 1%. 
    Analysts have criticised the government move saying it would erode the equity of these companies, as was evident on Thursday. Instead, they have suggested that these companies pay higher dividend to shareholders and the government, being the majority shareholder, use that amount for social causes. 
    TOI learnt that managing directors of all these six listed companies had jointly made a representation to the state government against the move, even as they prepared to call annual general meetings to seek consent of shareholders to comply with the government's wishes. 
    In fact, at least three PSEs—GMDC, GSFC and GIPCL—have their AGMs scheduled within this month. 
    The decision to transfer 30% of PBT was taken earlier this year amid strong opposition from IAS officials heading these PSEs. The most vocal among critics of the move was the GNFC CMD Sudha Anchalia who had told the government that such a move, aimed at ensuring corporate social responsibility (CSR), would not only bring down the rating of some companies but also affect their expansion plans because of reduced liquidity.

Adrienne Gusoff  - "Opportunity knocked. My doorman threw him out."