92 listed companies can pay Rs 34,000 cr in dividend: IiAS

As many as 92 listed companies can potentially return cash worth nearly Rs 34,000 crore to their shareholders in the form of dividend, proxy advisory firm IiAS said.

In a report released today, IiAS said that despite a muted earnings growth in financial year 2016-17, Indian companies can pay higher dividends from their existing large cash piles.

Based on an analysis of the financial of S&P BSE 500 firms, the report said 92 companies paid Rs 407 billion (Rs 40,700 crore) as aggregate dividend in 2016-17 and can additionally pay Rs 339 billion (Rs 33,900 crore).

These companies held aggregate cash and cash equivalents of Rs 1.85 lakh crore as on March 31, 2017.

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.

Of these 92 companies, the top four firms aggregate over 50% of the total incremental dividend amount. Interestingly, all the four are from information technology space.

Besides, IiAS (Institutional Investor Advisory Services India) said that five companies -- MRF, 3M India, ISGEC Heavy Engineering, Honeywell Automation Indiaand Bosch -- can pay dividends of over Rs 100 per share. Further, another seven firms can pay between Rs 50 and Rs 100 per share as dividends.

According to the report, dividend payout of these 92 firms is healthy yet these companies have "accumulated cash over the years which is depressing their return on capital employed".

The report also raised question of "how much cash conservation is appropriate. While boards must decide on capital allocation and liquidity management, shareholders also have the right to demand more efficient use of capital".

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