Financial Daily from THE HINDU group of publications
Tuesday, Sep 21, 2004
Financial Daily from THE HINDU group of publications Tuesday, Sep 21, 2004 |
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Corporate
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Announcements Engineers India scraps special dividend of Rs 55 Virendra Verma
Mumbai , Sept. 20 THE proposed special dividend of Rs 55 per share from the public sector Engineers India Ltd (EIL) is off. The previous government had proposed the dividend after it decided to go in for a strategic sale of EIL shares. A company official when contacted said the previous Government's plan to pay special dividend was linked to the disinvestment of the company. Since the disinvestment has been shelved, the issue of special dividend does not arise. In October last year, the Ministry of Petroleum & Natural Gas had proposed payment of dividend by EIL to the shareholders at Rs 55 per share. Since the payment of dividend was to be met from the reserves of the company, approval of the Department of Company Affairs was taken in March this year. EIL official said the company board, however, had not taken any decision on this issue. The stock price of EIL had risen sharply after EIL informed about the special dividend. Large number of investors had also bought the shares from the open market on expectation of the hefty dividend. However, after the new Government decided not to go ahead with strategic sale of PSUs, the stock price of the company came under heavy selling pressure and declined from Rs 360 levels just before the elections to current ruling market price of Rs 289.75. Brokers said the market has already discounted the scrapping of dividend, which is seen from the fall in the stock price.
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