Despite the underperformance of Indian corporates in the fourth quarter and the financial year ended March 2020, the current season of dividends has been unexpectedly generous to equity participants.
The combined payment of dividends by India's leading listed companies in the BSE 500 index was 6.5 percent higher in FY2020 and thus the fastest in the past three years. Equity investors should be thankful to cash-rich companies such as Tata Consultancy Services, ITC, Hindustan Unilever, Nestle, and Bajaj Auto.
However, excluding defensive sectors such as consumer and software services firms, dividend payout was down 17.6 percent year-on-year to Rs 1,12 lakh crore from Rs 1.36 lakh crore a year ago. In comparison, these firms had increased payments by 5.3 percent in FY19.
Traditionally large dividend-paying companies such as private sector banks, insurance companies, oil and gas majors, and metals and mining companies either cut or postponed dividend payments in FY 2020. Banks and insurance companies deferred the dividend payment as their regulator had given such advice because of the possible increase in debt owing to the Covid-19 epidemic. This is the first season of the dividend after mandating taxation of dividend income from shareholders whereas earlier companies were required to pay 20.56 percent dividend distribution tax on their dividend payment. Experts attributed the high dividend payment to changes in the law and the reduction in company income tax. UR Bhatt, director of Dalton Capital Advisors, said, "Since dividends now have to be paid to shareholders, many companies are paying savings on dividend distribution tax to shareholders through higher dividends per share." G Chokalingam, founder and managing director of Economics Research and Advisory, said the company income tax cuts in September largely benefited cash-rich companies and many of them gave their savings to shareholders through higher dividends.
The analysis is based on the interim or final dividend already proposed or already paid for FY 2020 on behalf of the BSE 500 companies that have declared FY20 results. 456 companies included in this sample have announced their results so far. Of these, 359 companies have paid an interim or final dividend for FY 2020. The number of such companies in FY 2019 was 379. Overall, the BSE 500 companies plan to distribute Rs 1.91 lakh crore among shareholders through dividends, up from Rs 1.8 lakh crore a year ago. Despite the hurdles, companies increased dividend payouts in the last financial year. The combined net profit of BSE 500 companies was down 25.6 percent year-on-year in FY2020, while their revenue declined 1.4 percent. This is the worst performance in the last six years.
As a result, many companies lost their savings or decided to retain a small portion of profits to appease shareholders.
SSC CGL Final Revised Results: SSC CGL Final Revised Result released, candidates who failed earlier have now passed.
SSC has released the CGL Final Revised Result (SSC CGL 2023 Final Revised Results). The revised result of the Combined Graduate Level Examination (CGLE), 2023) final result has been released by the
Nearly 400 years later, Guru and Shani will be seen very close to each other, see the great union of Jupiter and Saturn
Jupiter and Saturn conjunction 2020: The year ahead is going to give a wonderful view to the people of astronomical events. According to NASA, after 1623 i.e. about 400 years later, on December 21,
Silicon Valley's richest businessman renounces Russian citizenship, angered by the attack on Ukraine
Yuri Milner, Silicon Valley's richest Russian, said on Monday that he had given up his Russian citizenship. Milner completed the entire process of relinquishing citizenship in August. In a tweet,
Sachin Tendulkar Birthday: Five great records of Sachin Tendulkar, which are almost impossible to break
Today i.e. April 24, 2024, is the 51st birthday of Sachin Tendulkar (Happy Birthday Sachin Tendulkar). The veteran batsman of the Indian cricket team has made many records in his career. His
Layoffs: Coal India will show the way out of 5% employees every year, this process can continue for 10 years
Coal India Limited, the world's largest coal mining company, is planning layoffs to cut costs. Its preparation has also started. In a statement issued on Tuesday, Coal India said that to bring down
Ashraf Ghani's escape ruined our entire plan: Khalilzad
Zalmay Khalilzad was made a special representative in the talks that the US had started for a political solution with the Taliban in Afghanistan.
The world will wreak havoc: World War will start in four weeks! Russian military analysts warned
Amidst the corona epidemic, the threat of world war is now underway. Russian military analysts have warned that the world will witness a world war in the next four weeks. If the world war broke out
RCB vs DC: Bengaluru won the fifth consecutive match, after Rajat Patidar's stormy half-century, Yash Dayal took three wickets.
In the 62nd match of IPL 2024, Royal Challengers Bangalore defeated Delhi Capitals by 47 runs. This was RCB's fifth consecutive win. The team is still in the race for the playoffs. They have
Tamannaah Bhatia's statement caused her relationship with Vijay Varma to break? A hint of breakup from Instagram
Actress Tamannaah Bhatia and actor Vijay Verma were dating each other for a long time. Both were often spotted at events. Videos of the couple went viral on social media. In December last year, there
Air India: Tata will merge its four airlines into Air India, reports claim - Vistara brand will no longer exist
Tata Group wants to bring four different airline brands under the umbrella of Air India Limited. After the merger, the four Tata Group airlines, including Air India, Vistara, Air India Express, and
