The top 20 firms’ cumulative dividend outgo in FY22 stood at ₹1.66 lakh crore, translating into a dividend payout ratio of 37.18 percent, higher than 2020-21, when the dividend payout ratio was 35.55 percent, a report by Business Standard stated. However, this figure is lower than in 2019-20, when the dividend payout ratio was 42.19 percent, it added.
Analysts told BS that the financial year 2022-23 (FY23) may mirror the trend seen in FY22 as some companies grapple with a lack of good investable opportunities, forcing many to redistribute their profits as dividends while others may want to continue rewarding their shareholders.
Among stocks, the report pointed out that in April, Vedanta had announced an interim dividend of ₹31.5 per share, resulting in an outflow of ₹11,710 crore.
Meanwhile, BS added that companies in IT and fast-moving consumer goods, on the other hand, are not capital-intensive in nature.
“Instead they prefer to reward shareholders by way of dividends and even buybacks,” Chokkalingam G, founder and managing director (MD), Equinomics Research & Advisory told BS. PSUs, meanwhile, are encouraged to make substantial dividend payouts, Chokkalingam added, to help the government shore up its non-tax revenue.
ONGC, for instance, has an average dividend payout ratio of nearly 33 percent over five years, while IndianOil has a five-year average of 49 percent in terms of dividend payout, highlighted BS.
Coal India also has a five-year average of nearly 62 percent, reveals the data. In FY22, the dividend payout ratio of CIL, IndianOil, and ONGC was 60 percent, 47 percent, and 29 percent while NTPC and NMDC had a dividend payout ratio of 41 percent and 46 percent, respectively in the period under review, the report noted.
With a dividend payout ratio of only 9 percent in FY22, Reliance Industries (RIL) still figures in the top 20, owing to the quantum of payout in the period under review, it added. Also, JSW Steel’s payout ratio was at 25 percent in FY22, ahead of Tata Steel’s payout ratio of 16 percent in the same period.
