So far, 1007 profit-making companies have declared dividends of Rs 39,116 crore (Rs 391.16 billion). This is 28.3 per cent of their collective net profit of Rs 1,38,219 crore (Rs 1382.19 billion) in 2005-06.
The dividend payout was Rs 33,570 crore (Rs 335.7 billion) in the previous year, accounting for 28 per cent of the net profit of Rs 1,19,695 crore (Rs 1196.95 billion).
This means the dividend payout by these companies rose by 16.5 per cent, while their net profit increased by 15.7 per cent.
"Cash-rich corporates are rewarding their shareholders. Since dividends are tax-free in the hands of the recipients, promoters will always be happy to get hefty dividends," said an analyst with a brokerage.
As many as 114 companies paid dividends in 2005-06 after skipping it in the previous year. At Rs 464 crore (Rs 4.64 billion), the dividend payout by these companies accounted for 16.25 per cent of their net profit.
The aggregate net profit of these firms jumped over three-fold to Rs 2,854 crore (Rs 28.54 billion) in 2005-06, from Rs 779 crore (Rs 7.79 billion) in 2004-05.
If one excludes these firms from the list, 893 companies that handed out dividends in 2005 as well as 2006 paid more last year. The dividend payment was to the tune of 28.53 per cent of their net profit for 2005-06, up from 28.23 per cent in 2004-05.
Collectively, their net profit stood at Rs 1,35,595 crore (Rs 1355.95 billion) and dividend payout at Rs 38,652 crore (Rs 386.52 billion) last year.
Over 50 per cent of these companies, or 463 of them, increased the rate of dividend payout, 287 maintained it, and 143 pruned it.
Indiabulls Financial Services (90 per cent), Royal Orchid Hotels, and Allsec Techno (50 per cent each), India Infoline (30 per cent), and Anant Raj Industries (25 per cent) declared their maiden dividends last year.
Oil and Natural Gas Corporation, NTPC, Indian Oil Corporation, Reliance Industries, Infosys, and Hindustan Lever were among the highest dividend payers.