India Inc's payout rises 20.6%

Rs 34,055 cr dividend paid in FY05.

Corporate India is in a generous mood. Its dividend payout leaped to a new high of Rs 34,055 crore in financial year 2004-05 ""up 20.6 per cent or Rs 5,822 crore over the previous year's payout of Rs 28,234 crore.

Over the last five years, the dividend payout has gone up from Rs 14,525 crore in 2000-2001 to Rs 34,055 crore in 2004-05.

The number of dividend-paying companies increased from 791 in 2001-02 to 990 in 2004-05. "With corporate profits showing no signs of slowing down even in the current financial year, the dividend distribution is likely to be much higher this year," said an analyst.

As promoters were the major beneficiaries of dividend payouts (it is tax free at the hands of the receiver), the buoyancy in dividend would continue in the coming years, he said. As many as 21 companies have proposed interim dividends during the first quarter of the current financial year.

In 2004-05, promoters took home tax-free dividend payouts of Rs 21,699 crore, of which the share of promoters in the private sector was Rs 8,033 crore. The government, through its shareholding in nationalised banks and listed manufacturing companies raked in Rs 13,666 crore.

Institutional investors too benefited by the liberal dividend payouts raked in Rs 5,556 crore in 2004-05.

Financial institutions received Rs 3,091 crore and the public Rs 3,700 crore. While the dividend payout hit a record high in absolute terms, its share in total profits, however, declined to a five-year low.

The 1,049 companies studied here distributed 28.53 per cent of their net profit in 2004-05 compared to a payout ratio of 29.07 per cent of net profits in 2003-04. The payout ratio was higher at 31.10 per cent in 2002-03, 33.53 per cent in 2001-02 and 28.9 per cent in 2000-01.