India Inc splurges on dividends

Average payout moves up from 20% to 25% in FY04.

India Inc has been generous with dividends. The 100 companies that have so far declared dividends for 2003-2004 propose to pay total dividends of Rs 4,334.18 crore, up 54.1 per cent over the Rs 2,811.34 crore paid in the previous year.

The average payout of these companies has increased from 20.33 per cent of the net profit in 2002-03 to 25.33 per cent of the net profit in 2003-04.

Of the 100 companies, 59 companies have increased the rate of dividend, 26 companies have maintained their rates, while 15 companies have cut their rates.

However, the distribution is skewed: the top 10 companies have distributed 72 per cent of the total dividends paid out. The payout of these companies increased from 17.1 per cent of their net profit in 2002-03 to 27.2 per cent in 2003-04.

Among the 59 companies that have increased their rate of dividend are Infosys Technologies, Wipro, Satyam Computer Systems, Godrej Consumer Products, Nicholas Piramal, Grasim Industries, Goodlass Nerolac, Hindalco and Cadila Healthcare.

Infosys Technologies had the highest dividend payout of Rs 862.46 crore. It recommended a dividend of Rs 129.50 per Rs 5 paid up share, including a one-time special dividend of Rs 100 per share. Last year, it had paid a dividend of Rs 27 per share.

Wipro proposes to pay a dividend of Rs 29 per share of Rs 2 each. Wipro's total payout on account of the one-time special dividend of Rs 25 per share and final dividend of Rs 4 per share works out at Rs 675.70 crore.

Satyam Computer Services has proposed Rs 4 per share dividend on a face value of Rs 2 against Rs 3 per share paid for the previous year.

Reliance Industries has proposed a Rs 5.25 per share dividend against Rs 5 per share paid in previous year while Reliance Energy has recommended a Rs 4.50 per share dividend for 2003-04 against a dividend of Rs 4.40 per share paid last year.

Grasim Industries proposes to pay Rs 14 per share dividend against Rs 10 per share paid in the previous year. ICICI Bank has maintained the rate of dividend of Rs 7.50 per share paid in the previous year.

This year's pay out will cost the bank Rs 462 crore. HDFC Bank has increased the rate of dividend by Rs 0.50 per share to Rs 3.50 per share for the current year.

IDBI Bank has maintained it at Rs 1.25 per share. Everest Industries has proposed a Rs 32.50 per share dividend, including Rs 30 per share special dividend on an addition profit of Rs 51.77 crore.