ONGC board approves special dividend, share split and bonus shares ahead of stake sale

State-run explorer Oil and Natural Gas Corporation Ltd (ONGC) will pay a special interim dividend of Rs32 per Rs10 fully paid-up share for the financial year 2010-11.

The board of directors of the company at its meeting today also recommended for approval of the shareholders sub division of each Rs10 fully-paid equity share into two fully paid-up equity shares of Rs5 each.

The board also proposed issuance of bonus shares in the proportion of one new equity share of Rs5 each for every one existing equity share of Rs5 each post split, by capitalisation of reserves.

The board said ONGC would seek shareholders' approval for the proposals for the stock split and bonus share offer through a postal ballot.

The dividend works out to 2.41 per cent based on the current market price of the ONGC stock of Rs1,323.35. Dividend comes tax-free in the hands of shareholders although the company pays a dividend distribution tax of 15 per cent.

The ONGC stock hit a high of Rs1,338.90 and a low of Rs1,304 during today's morning trade. The stock had hit a record high of Rs1,472 on 28 September 2010 and a 52-week low of Rs997.35 on 22 April 2010.

The stock had outperformed the market gaining 0.44 per cent against the Sensex's 3.26 per cent fall over the past one month ended 15 December 2010.
 
ONGC has, meanwhile, bagged the award for best financial performance and corporate governance jointly awarded by the department of public enterprises in association with Indian Chamber of Commerce and Deloitte early this month.

Another state-run unit NTPC also bagged the award by scoring equal points.