Corporates on dividend payout spree

140 firms pay 23.3% of net profit.

Corporate India's dividend payout has surged in 2004-05, with more than 60 per cent of companies hiking dividends. The payout of these companies increased to 23.3 per cent of their net profit from 21.8 per cent in the previous year.

One hundred and forty of the 225 companies that declared dividends have increased their payouts while 25 have pruned dividends, and 61 maintained them at the same level as in the previous year. 

Hefty payouts Dividend (% of net profit)
	2003-04	2004-05
Hero Honda	1,000.00	1,000.00
Wipro	1,450.00	250*
Satyam Computer	200	250
Hexaware Tech	100	250
Dabur	200	250
Nestle India	200	245
Infosys Techn	2,590.00	230**
Hindalco	165	200
Kirloskar Brothers	200	200
Indo National	200	200
* 750 per cent on pre-bonus capital ** 920 per cent on pre-bonus capital

The dividend payout ratio (as a percentage of net profit declared) for India Inc so far, however, remains unchanged at around 26.6 per cent, chiefly because Wipro and Infosys Technologies, which had declared hefty one-time dividends in 2003-2004, opted for normal dividends in 2004-05.

For 225 companies, the dividend payout for 2004-2005 amounted to Rs 11,362 crore, up 4.62 per cent over the Rs 10,593 crore paid in 2003-2004.

However, if one excludes the huge (Rs 1,631 crore) special dividends paid in 2003-2004 by Infosys Technologies, Wipro and Hindustan Lever, the dividend payout in 2004-2005 for these 225 companies is up 26.6 per cent.

Infosys Technologies continued to be the highest dividend-payer, proposing a dividend of 230 per cent (Rs 11.50 per share of Rs 5 each) on the post-bonus capital, which has increased four times due to bonus shares being issued in the ratio of 3 for 1.

On the pre-bonus capital, the dividend works out to a huge 920 per cent (Rs 46 per share). In 2004-2005, the company had paid a dividend of 2,590 per cent, including a one-time special dividend of 2,000 per cent.

Wipro, too, lived up to expectations, declaring a dividend of Rs 250 per cent on its post-bonus capital (Rs 750 per cent on pre-bonus capital). Joining the dividend bandwagon are many more IT companies like HCL Infosystems, HCL Technologies, Hexaware Technologies and i-flex solutions.

Multinational companies such as GlaxoSmithkline Pharmaceuticals, Nestle India, Motor Industries, Syngenta India, Albright Wilsom, Pfizer and Siemens also stepped up dividends.

Private sector giant Reliance Industries proposed a dividend of 75 per cent against 52.5 per cent paid in the previous year. Grasim stepped up its dividend to 160 per cent from 140 per cent and Hindalco increased it to 200 per cent from 165 per cent.