6.5%: Annual rise in combined dividend payout in the 2019-20 financial year by India’s top listed companies that are part of the BSE500 index.
- These companies’ combined dividend payout for FY20 stood at Rs 1.91 trillion, against 1.79 trillion for FY19.
- The surge in dividend payouts — in spite of weak markets and at least the last quarter being severely affected by the coronavirus crisis — was mainly driven by cash-rich players like Tata Consultancy Services, ITC, Hindustan Unilever, Nestle and Bajaj Auto.
- Excluding firms in the defensive sectors — IT services, FMCG and pharmaceuticals — India Inc’s dividend payout, at Rs 1.12 trillion for FY20, was down 17.6% from Rs 1.36 trillion the previous year.
- Traditionally large dividend payers like private-sector banks, oil & gas majors, and metal & mining companies either lowered their payouts in FY20 or skipped it.
- Experts also attribute the higher overall dividend payout to a change in dividend law (dividend is now taxed in the hands of shareholders) and a reduction in corporation tax rate.
A few links for further reading
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There was a time when pay cuts we see today were a complete no-no; govt and public sector jobs were considered safe, as pay and pensions were both assured. Not any longer, it seems, writes T N Ninan
Quick approval, grace period
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