Public sector major GAIL (India) Limited, India?s largest natural gas transmission company, is considering issue of bonus shares soon. The company?s board is likely to soon take a call on it. The issue of bonus shares by GAIL was discussed at a recent meeting of the inter-ministerial committee (IMC), held to review the performance of the company. Sources said it was pointed out at the meeting that GAIL has not issued any bonus shares in the recent past. On a paid up capital of Rs. 845.65 crore, free reserves of the company stood at Rs. 10,547.26 crore, which is about 12.5 times of the paid up capital.
In terms of Department of Public Enterprises (DPE) guidelines, central public sector enterprises (CPSEs) having reserves and surplus more than three times of their paid-up capital are expected to declare bonus shares. Sources revealed that the IMC has already recommended to the high-level apex committee that the declaration of bonus shares should be considered by the company in terms of DPE guidelines.
When contacted, GAIL chairman and managing director U D Choubey confirmed that the issue of bonus shares was discussed at the IMC meeting and said, ?We are looking into this issue.?
The IMC and apex committees have been constituted by the government to review the performance of navaratana CPSE. The IMC is headed by the secretary, DPE and the apex committee by the cabinet secretary.
GAIL has first gone to the markets in 1999-2000 when it raised funds through the GDR route. In 2004, the company again disinvested 10%equity through a IPO. Currently, the government is the largest shareholder of GAIL with a 57.34% stake while another 6.36% is held by LIC. ONGC holds a 4.83% stake while Indian Oil?s (IOC?s) holding in the company stands at 2.41%. Around 5.6% of GAIL?s equity is locked in GDRs while the Foreign institutional investors (FIIs) share in the company stands at 16.17%. Public and others hold the remaining 7.29% share.