Shareholders reap rich dividends

India Inc lavish in dividend dole-out for '05-06 on strong results.

Riding on a strong performance in 2005-06, India Inc seems to be in a generous mood over dividend payouts.

Forty companies that had skipped dividends in the last few years have decided to open their purse strings for shareholders, announcing dividends between 1 and 50 per cent for 2005-06.

Forty companies have reported net profit growth of more than 100 per cent in 2005-06. Their aggregate net profit more than doubled from Rs 928.66 crore in 2004-05 to Rs 1,907.80 crore in 2005-06.

The list includes Allsec Techno (50 per cent dividend), India Infoline and IL&FS Investmarts (30 per cent each), TTK Healthcare, Kojam Investments, Sherton, Siel and Vardhman Holdings (20 per cent each), among others.

Overall, the dividend payout ratio of corporate India has remained unchanged at 24 per cent. So far, 302 companies have announced a dividend payout of Rs 18,216 crore for 2005-06, against Rs 16,342 crore in 2004-05.

The rise in quantum of payout is on account of high net profit. Collectively, their net profit stands at Rs 75,762 crore in 2005-06, up from Rs 66,989 crore in 2004-05.

A Business Standard Research Bureau study shows that out of 302 companies, 140 firms have increased their 2005-06 dividend payout, while another 68 have proposed to maintain the level of payout at the previous year's level and 54 have reduced it.

Thirty-six firms including Infosys Technologies, Wipro, Suzlon Energy, NMDC, Parry Agro, Finolex Industries, Dabur Pharma, Gabriel, Hindustan Oil Explorations and Rallis have doubled their dividend payouts.

On the other hand, public sector companies like HPCL, IBP, Bongaingaon Refineries and SAIL have reduced their dividend payout rates for 2005-06.

Infosys Technologies declared 900 per cent dividend (Rs 45 on Rs 5 paid up) in 2005-06, against 230 per cent in the previous year. This included a special silver jubilee dividend of 600 per cent (Rs 30 per share). In absolute terms, Indian Oil Corporation paid the largest dividend of Rs 1,460 crore for 2005-06.

In the private sector, Reliance Industries is the largest dividend payer at Rs 1,394 crore, against Rs 1,045.13 crore last year. Infosys Technologies is the second biggest dividend payer in the private sector, with a payout of Rs 1,238 crore, against Rs 309.80 crore in the previous year.

The other top dividend payers in the private sector include ITC (Rs 995.13 crore), Tata Steel (Rs 719.77 crore), Wipro (Rs 714.15 crore), TCS (Rs 660.56 crore), HDFC (Rs 646.20 crore), ICICI Bank (Rs 632.96 crore), Tata Motors (Rs 498.04 crore), Bajaj Auto (Rs 404.72 crore), and Larsen & Toubro (Rs 303.16 crore).

Prominent dividend payers in the public sector include GAIL(India) (Rs 845.65 crore), SAIL (Rs 826.08 crore), State Bank of India (Rs 736.82 crore) and NMDC (Rs 365.58 crore).

Among newly listed firms, Emkay Share, Nitco Tiles, Sunil Hitech Engineering and PVR have each declared 10 per cent dividend, while the figure is 20 per cent each for Ramsarup Industries and Bannari Aman Spinning.

The list also includes Everest Kanto Cylinder (35 per cent), ABG Shipyard (12 per cent) and Sasken Communication Technologies (30 per cent).