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India dividend payouts rise in FY26, but payout ratio hits 12-year low
Aggregate dividends across BSE 500 companies increased 8.2% year-on-year to ₹5.13 trillion in FY26, while the payout ratio fell to 27.6% from 30.4% in FY25.
Indian companies in the BSE 500 boosted total dividend payouts in 2025-26, but dividend growth slowed as boards kept more earnings for business retention and investment caution, according to a Mint analysis of unaudited results including proposed dividends. Aggregate payouts rose 8.2% year-on-year to ₹5.13 trillion in FY26, down from an 11.9% increase in FY25, when payouts totaled ₹4.74 trillion. The payouts remain led by cash-rich, capital-light companies including Tata Consultancy Services, HDFC Bank, Infosys, ITC, ONGC, and Coal India. The dividend payout ratio, which measures the share of earnings distributed to shareholders, fell to 27.6% in FY26, the lowest level in 12 years, from 30.4% in FY25. Tanvi Kanchan of Anand Rathi Shares & Stock Brokers said the moderation reflects the absence of special payouts seen in FY25 and a more conservative reset in per-share dividend policies amid uncertain earnings visibility.
Kanchan added that FY27 dividend outcomes will likely hinge on whether recent profit declines are limited to a few cyclical sectors, whether capital expenditure plans stabilize or keep softening, and whether easing interest rates and global trade uncertainty improve corporate confidence. She also noted that some large-cap firms have favored share buybacks over dividends, citing tax and confidence signaling considerations, and said a low payout ratio does not necessarily mean lower total shareholder returns.