Clearing shareholders' confusion over returns they get from equities, market regulator Securities and Exchange Board of India on Friday made it mandatory for companies to declare dividend on per share basis, besides prescribing a uniform procedure for dealing with unclaimed shares.
"It has been decided to mandate that listed companies shall declare their dividend on per share basis only," Sebi said while issuing an amendment to the Equity Listing Agreement.
The step, the regulator said, is expected to bring uniformity in the manner of declaring dividend amongst listed companies.
At present, a company can declare dividend as a percentage of face value of the share or in rupee per share, independent of the face value.
"Sebi's initiative clears the confusion of shareholders who get confused whether the dividend is a percentage of face value or market price," Jagannadham Thunguntla, equity head of SMC Capital, said.
To deal with the unclaimed shares, Sebi said, all companies will have to maintain a separate suspense account for such shares and deposits, bonus shares etc into the account.
These initiatives come into force with immediate effect, Sebi said.
