Special and extra dividends paid out by a clutch of Public Sector Undertakings (PSUs) and a few private companies have pushed up the total value of dividends paid in FY17.
Special and extra dividends paid out by a clutch of Public Sector Undertakings (PSUs) and a few private companies have pushed up the total value of dividends paid in FY17. In FY16, the additional tax on dividend income of `10 lakh or more had prompted many firms to declare higher dividends.
Data compiled form Capitaline showed that so far in FY17, as many as 137 companies from the BSE500 universe have announced dividends worth `97,441 crore as compared to `84, 272 crore by 196 firms last year.
For instance, Vedanta announced its second interim dividend of `17.70 per share on Thursday. The company also announced a similar payout for shareholders of Cairn India, who will become shareholders of the Company pursuant to the Scheme of Arrangement between Vedanta Limited and Cairn India. The total amount of dividend paid including that to Cairn shareholders amounted to `6,580 crore. Last week, another group company Hindustan Zinc had also announced a special dividend of `13,985 crore taking its total dividend pay out to `27,157 crore (including dividend distribution tax) this financial year.
While promoter holds 64.9% in Hindustan Zinc, the government has a residual stake of 29.5% as of December 2016. For the government, the hefty `11,259 crore dividend will give it some respite in meeting its fiscal deficit targets.
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“We are pleased to reward our shareholders with a special dividend, which reflects the company’s confidence in its continued robust performance and demonstrates our commitment towards delivering value for our shareholders. Since disinvestment by the government in 2002, the cumulative dividends paid by the company, including the current special dividend, is Rs 37,517 crore including dividend distribution tax,” said Chairman Agnivesh Agarwal after the announcement.
While mounting bad loans may have forced some PSBs to skip dividend payout this year, the short fall has been offset by cash rich oil companies. While IOCL paid an additional `4 per share to `18 per share in FY17, Gail India declared a dividend of `8.5 per share as against `5.5 for FY16.