FY24 dividend income: Business families beat govt

September 25, 2024 09:22

Dividends and proceeds from share buybacks by individual promoters and prominent business families in India in 2023-2024 were once again higher than the Government of India's earnings from listed central public-sector undertakings (CPSUs) or multinationals' earnings from their listed subsidiaries and associate companies in India.

Individual promoters and promoter families together earned around Rs 1.064 trillion through dividends and proceeds from share buybacks from their listed companies in FY24, up just 0.2 per cent from a year ago.

Promoter families' earnings in FY24 were, however, nearly 28 per cent higher than the government's estimated dividends of around Rs 82,900 crore (Rs 829 billion) from listed CPSUs such as Oil and Natural Gas Corporation, Indian Oil, Coal India, State Bank of India, Life Insurance Corporation, Power Grid Corporation, NTPC, and Bank of Baroda.

The government's dividend was, however, up 35 per cent year-on-year in FY24 from Rs 61,409 crore (Rs 614.09 billion) a year ago.

In comparison, multinationals such as Unilever Plc, Suzuki Motor Corp, British American Tobacco, Nestle SA, and Colgate-Palmolive Inc earned Rs 27,710 crore (Rs 277,10 billion) as dividend from their listed subsidiaries and associates in India, up 11.2 per cent from the Rs 24,907 crore (Rs 249.07 billion) in FY23.

With this, the dividend of promoter families has been higher than that of the government for six consecutive years.

The earnings of promoter families such as the Tatas, and those of Azim Premji, Shiv Nadar, Mukesh Ambani, and Anil Agarwal were ahead of the government's earnings for the first time in FY19.In comparison, the multinationals' combined earnings from their Indian subsidiaries and associates have always been much smaller.

The higher income of promoter families has been attributed to large dividend payouts and share buybacks by IT services majors such as Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and Tech Mahindra.

These five IT services majors were among the four biggest dividend payers, including expenditure on share buybacks, in FY24.A majority of the cash-rich companies in IT services are owned and promoted by individuals and families. In comparison, there is no government presence in this space.

-- Krishna Kant/Business Standard

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