India Inc Showers Dividend Bounty

In a bold display of corporate confidence, Indian companies have handsomely rewarded shareholders with a record ₹4.9 trillion in dividends in FY25, even as profit growth slowed.

- Mayur Bhalerao

The generous payout underscores a strategic shift among firms to prioritize returns for investors over aggressive reinvestment, signaling both optimism and caution in a volatile economic climate.

A Mint analysis of 496 BSE 500 companies, based on Capitaline data that uses both audited and unaudited numbers (including proposed dividends), shows that dividend payouts rose 11% year-on-year in FY25, outpacing net profit growth of 9.5%. This marks the first such divergence in three years. In contrast, profit jumped 29% in FY24 while dividends grew a modest 7.5%. In FY23 too, firms were less generous, when profit grew 11% but dividend payouts rose only 8.8%. The trend reversal in FY25 points to a strategic recalibration—corporates are choosing to reward shareholders more aggressively even as earnings momentum slows.