Free fall goes unchecked

Following a 8216;request8217; by the state Government, the six public sector enterprises PSE in Gujarat have agreed to set aside 30 per cent of their profit before tax PBT for social development. The result: angry investors, a steep decline in share prices of these companies and tightlipped higher authorities of these state run PSUs. The impending annual general meetings AGM of four PSEs later this month is expected to be stormy. All the six PSEs-Gujarat Narmada Valley Fertilisers Corporation GNFC, Gujarat Mineral Development Corporation GMDC, Gujarat State Fertilisers and Chemicals GSFC, Gujarat Alkalies and Chemicals Ltd GACL, Gujarat Industrial Power Corporation Ltd GIPCL and Gujarat State Petronet Ltd GSPL-have shown a decline in their market prices since the announcement.

The worst hit stock portfolio was of GMDC that was down by Rs 15 per share when the market closed on Friday. This PSE, with a market capital of Rs 2697.34 crore, has seen its share prices nosedive by Rs 68 within a fortnight.

On September 2, GMDC, which had registered an annual gross profit of Rs 503.47 crore, had its shares priced at Rs 237. The GMDC has set aside over Rs 151 crore for social causes and has its AGM on September 24. GSPL stocks also dipped to Rs 58. The GSPL will contribute over Rs 125 crore to social welfare. The company has a market capital of Rs 3259 crore and had registered a gross profit of Rs 417.90 crore last year. GSFCL has its AGM on September 26. Its share-prices are down by Rs 29. From Rs 172.25 on September 2, it dipped to Rs 143 on September 12. As per the new policy, the company will spend Rs 62 crore on social welfare. GNFC registered a gross profit of Rs 686.73 crore in the last financial year and will release Rs 206 crore for social welfare. GIPCL, which has its AGM on September 20, has seen its stock prices fall by Rs 6 since September 2. The heads of the six-PSE8217;s refused to comment on the issue.