Bajaj Auto, the cash-rich two- and three-wheeler maker, on Thursday amended its dividend distribution policy. The company said it would arrive at its dividend payout ratio based on the surplus funds available with the company and that it would pay a percentage of profits after tax on the company’s standalone financials.
Shares of Bajaj Auto rose 2.46% on the BSE on Thursday to Rs 3,663.45 after the announcement. Prior to the amendment, the dividend payout policy was around 50% of profits after tax on standalone financials to the extent possible. As per the revised policy, dividend distribution would be up to 90% when the surplus cash is over Rs 15,000 crore. If the surplus was between Rs 7,500 crore and Rs 15,000 crore, it would be up to 70% and if surplus was below Rs 7,500 crore, the dividends would be up to 50%.
Bajaj Auto said its dividend distribution policy was primarily aimed at enhancing long-term shareholder value and sustainable growth.
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