India’s top promoters saw a big jump in their income from equity dividends and share buybacks in FY22 in line with a sharp jump in corporate earnings, a report by Business Standard stated.
Income from dividends and share buybacks for promoters surged 50.6 percent year-on-year in FY22 to around ₹37,000 crore, as against a 12.6 percent rise seen in FY21, it said.
In comparison, India’s per capita income is estimated to grow by 16.7 percent in FY22 after contracting by 4 percent in FY21, it added. This has widened the income gap between an average Indian household and the country’s top promoters and business families.
"The country's top 50 promoter families earned ₹709.4 crore on average from their companies in FY22, while the median income of these promoters was ₹123.2 crore in the last fiscal. The promoters’ earnings from dividends and share buybacks is over and above their regular income such as salary, commissions, board sitting fees, bonuses and other perquisites," the BS report informed.
The report further noted that the top 50 promoters' average income from dividends and share buybacks in FY22 was nearly 47,300 times higher than India's average per capita income of ₹1.5 lakh last fiscal. Similarly, these top promoters' median income was nearly 8,200 times that of India's per capita income in FY22.
The top 10 richest promoters reported even faster growth in their income in FY22, which grew 63 percent year-on-year, noted the report.
One must note that the analysis is based on a common sample of 338 companies, which have so far declared final dividends for FY22. The analysis is restricted to family- and individual-owned companies and excludes public sector companies, listed multinationals, institutions-owned companies and Tata Group firms.
The report further informed that the biggest earners were the promoters of metals & mining companies but three out of the top five earners were the promoters of technology companies such as Wipro, Infosys, and HCL Technologies who earned the most from their companies by way of equity dividend and share buybacks.
Anil Agarwal family – which owns Vedanta group – leads the league table for FY22 with a gross dividend income of ₹11,677 crore followed by the Shiv Nadar family of HCL Technologies who earned ₹7,254 crore from the flagship company in FY22 by way of equity dividends, the report stated.
Mukesh Ambani family was in the third position, with earnings of around ₹2,657 crore by way of dividends from their flagship Reliance Industries. Meanwhile, Azim Premji of Wipro stood at the fourth position, who got ₹2,401 crore as equity dividend from his IT major in FY22, reported BS.
Finally, the five promoters’ families of Infosys are at the fifth spot in the league table with a combined dividend income of ₹1,709 crore in FY22. Infosys conducted a share buyback programme worth ₹9,200 crore between June and December 2021, but the company's shareholding pattern suggests that promoters didn't participate in it.
"Other individual promoters or promoter families with big dividend income from their listed companies include Rahul Bajaj family ( ₹1,381 crore), Asian Paints promoters ( ₹967 crore), Harsh Mariwala of Marico ( ₹710 crore), Munjals of Hero Group ( ₹660 crore) and Burmans of Dabur ( ₹619 crore)," it added.
The Reserve Bank of India’s 2020-21 annual report noted that output and employment losses in India and globally were unprecedented with a particular impact on the poor.
“The pandemic also turned out to be highly inequitable – it is estimated that around 95 million additional people around the world have been forced into extreme poverty during the year, with 80 million more undernourished, mostly in low-income countries,” the report quoted the RBI saying.
