India Incs dividend payout rises

Written by Pradip Kumar Dey | Mumbai | Updated: Jun 24 2011, 07:54am hrs
As the economy showed signs of revival, corporate India declared higher dividends to their shareholders in the last financial year. An FE survey of 918 major companies (excluding banks and NBFCs) shows that their aggregate dividend pay-out increased by 36% from R45,504 crore in 2008-09 to R61,952 crore in 2009-10 and increased further by 23.7% to R76,628 crore during 2010-11. The aggregate net profits of the sample companies during the same period have also increased by 21.8% from R1.88 lakh crore to R2.29 lakh crore during 2009-10 and increased thereafter by 16.1% to R2.66 lakh crore during 2010-11. In fact, the share of dividend in net profit, has steadily increased from 24.16% during 2008-09 to 26.96% during 2009-10 and further increased to 28.76% during 2010-11.

On the basis of the rate of equity dividend, Hero Honda Motor topped the list of top 5 corporates with 5250% , followed by Patni Computer (3150%), Colgate Palmolive (2200%), Crisil (2000%) and TCS (1400%). Among the 918 dividend paying companies for 2010-11 and 2009-10, 449 raised the rates of dividend, 163 paid lower rates and 306 maintained their levels.

Among the 449 companies, those who raised their dividend payment significantly during 2010-11 are Patni Computer, Crisil, Merck, Infosys Techno, Aventis Pharma, Colgate Palmolive and Coromandel International.

On the other hand, companies which reduced their dividends significantly during 2010-11 are Engineers India, TCS, ITC, EID Parry, Hero Honda Motors and Castrol India. Among the 30 industries studied, 18 distributed dividends at the rate of less than 30% of their net profit. Three industrial groups namely cigarettes, oil exploration and personal care recorded a ratio in the range of 50% to 70%, while other three industries namely hotels, food and products and shipping recorded more than 40%.