88 listed companies can pay dividends totalling Rs 27,600 crore: Report
NEW DELHI: As many as 88 listed companies can pay dividends worth Rs 27,600 crore but many continue to hold cash stockpile, according to proxy advisory firm IiAS.
In a report released today, IiAS said companies clearly continue to hold cash stockpiles and must consider paying higher dividends.
Based on an analysis of the financials of S&P BSE 500 firms for the fiscal 2016, the report said 88 companies paid Rs 278 billion (Rs 27,800 crore) as aggregate dividend in FY 2015-16 and can additionally pay Rs 276 billion (Rs 27,600 crore).
"Of the 88 companies identified, the top seven companies aggregate 50 per cent of the total incremental dividend of Rs 276 billion," it added.
The findings also come at a time when there are demands in certain quarters that companies should reward investors by way of higher dividends and buybacks.
Earlier this week, IT major TCS announced plans to buyback shares worth Rs 16,000 crore.
"79 per cent of the S&P BSE 500 companies paid out dividends in FY 2015-16.
"While median dividend payouts have dropped marginally to 23.3 per cent in FY 2015-16 from 24.5 per cent in FY 2014-15, the aggregate dividend as a proportion of cash and equivalents has consistently increased in each of the past five years," the report said.
Noting that dividend growth has outpaced growth in net profits over the past five years, IiAS said dividends, in absolute amounts, have increased at a CAGR of 12.7 per cent whereas profits grew just 2.8 per cent CAGR between FY 2010-11 and FY 2015-16.
CAGR refers to Compounded Annual Growth Rate.
In a report released today, IiAS said companies clearly continue to hold cash stockpiles and must consider paying higher dividends.
Based on an analysis of the financials of S&P BSE 500 firms for the fiscal 2016, the report said 88 companies paid Rs 278 billion (Rs 27,800 crore) as aggregate dividend in FY 2015-16 and can additionally pay Rs 276 billion (Rs 27,600 crore).
"Of the 88 companies identified, the top seven companies aggregate 50 per cent of the total incremental dividend of Rs 276 billion," it added.
The findings also come at a time when there are demands in certain quarters that companies should reward investors by way of higher dividends and buybacks.
Earlier this week, IT major TCS announced plans to buyback shares worth Rs 16,000 crore.
"79 per cent of the S&P BSE 500 companies paid out dividends in FY 2015-16.
"While median dividend payouts have dropped marginally to 23.3 per cent in FY 2015-16 from 24.5 per cent in FY 2014-15, the aggregate dividend as a proportion of cash and equivalents has consistently increased in each of the past five years," the report said.
Noting that dividend growth has outpaced growth in net profits over the past five years, IiAS said dividends, in absolute amounts, have increased at a CAGR of 12.7 per cent whereas profits grew just 2.8 per cent CAGR between FY 2010-11 and FY 2015-16.
CAGR refers to Compounded Annual Growth Rate.
