Capstone Project 2020-22

Final Report
Sem IV

Title of the Project:-

Dividend distribution policy in various sector

Submitted by:

Name of Name of the

Faculty Guide: Uma Ghosh Student: Jipin V. Nair
Designation: Assistant Professor Roll No.: 20730020008
Program: PGDM Finance
Batch: F3
Semester: IV

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 Institute for Technology and Management
Plot No. 25 / 26, Institutional Area,
Sector – 4, Kharghar, Navi Mumbai

CERTIFICATE FROM THE FACULTY GUIDE

This is to certify that the Project Work titled Dividend distribution policy in various sector
is a bonafide work carried out by Mr.: - Jipin V. Nair Roll No 20730020008
A student of PGDM p r o g r a m 2020 – 2022 of the Institute for Technology & Management,
Kharghar, Navi Mumbai under my supervision & guidance.

Signature of Guide :

Name of Guide : Prof. Uma Ghosh

Designation : Assistant Professor, ITM Kharghar

Date: Place: Kharghar, Navi Mumbai

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 ACKNOWLEDGEMENT

Execution of a project of this nature is impossible without active support from the faculty guide
and professors of the Institute. I would like to express my sincere gratitude to my guide
Prof. Uma Ghosh for his/ her guidance during the entire project duration.

I also extend my sincere thanks to all those who directly and indirectly helped me to complete
the project.

Name of the Student:- Signature of Student:-

JIPIN V. NAIR

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 INDEX
Chapters Content Page No.

Front Cover Page 1

Certificate from the Faculty Guide 2

Acknowledgement 3

Table of Contents 4

Table of Contents

Chapter 1 Introduction 5-47

1.1General overview of the sector 6-14

1.2 Sectoral growth last few years – Industry Trend 14-18

1.3 Govt Policies/Regulation of the Sector 19-21

1.4 Overview of the Company 22-42

1.5 SWOT Analysis 41-45

1.6 Problem on hand 45

46
1.7Historical perspective
46
1.8 Scope of the study
Chapter 2 47-52
Literature Review
49-51
2.1 Collection of relevant literature and quote the source of each
material
2.2 Research gap identification 52

52
2.5 Objective of the study
Chapter 3 53-54
Research Methodology
54
3.1 Research Design
54
3.2 Data Source
54
3.4 Sample size
Chapter 4 55-59
Data Interpretation and Analysis
Chapter 5 60-61
Summary and conclusion
62-64
References

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 Chapter: - 1 INTRODUCTION

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1.1 GENERAL OVERVIEW OF THE SECTOR
DIVIDEND
The word "dividend" has arrived from the Latin word which is "dividendum"(which means things
to be divided). This are payments made by an organization to its shareholder members. it's the
portion of corporate profits paid bent on stockholders. When an organization earns a profit or
surplus, that cash is put to 2 uses: it can either be re-invested within the business (called retained
earnings), or it is paid to the shareholders as a dividend. Many corporations retain some of their
earnings and pay their dividends. For a joint stock company, a dividend is allocated as a set amount
per share. Therefore, the shareholder he/she receives a dividend in the proportion to their
shareholding. For the joint stock company, paying dividends isn't an expense; rather, it's the division
of an asset among shareholders. Public companies usually pay dividends on a hard and fast
schedule, but may declare a dividend at any time, sometimes called a special dividend to tell apart
it from an everyday one .Cooperatives, on the opposite hand, allocate dividends in step with
members' activity, so their dividends are often considered to be a pre-tax expense A cut in dividends
generally hurts a stock’s price because it sends a symbol to stockholders that management’s outlook
for the longer term is that the corporate cannot still pay the dividend. Most companies therefore set
out with a coffee dividend and only increase it once they feel that the earnings prospects have
improved sufficiently to permit for maintaining the next dividend. Many companies will even
borrow money in a very bad year so as to avoid cutting the dividends.

Types of dividend

1. Cash Dividend
Cash dividend is the most popular form of dividend payout, in which a company issues the dividend
to all of their shareholders where the money is deposited in the bank a/c of their shareholders asper
the holdings of the investors. Usually there is a pre decided process for the individual regarding the
dividend declaration

2. Stock Dividend
If a company is issuing some additional shares for the common shareholders without any
considerations from them then the action becomes stock dividend. And if the company issues less
than 25%of the previous stocks which were issued will be treated as stock dividend, and if more
are issued then it is called stock split

3. Property Dividend
Any company which issues any non-monetary dividend to their shareholders , and the issued
property dividend would be recorded against the current market price of the assets which distributed

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4 Scrip Dividend

When a company don has enough of the funds to pay dividend then it might choose to pay the
dividend in the form of a promissory note, to pay the shareholders at a later date

5 Liquidating dividends

When the company decides or it thinks to return the original amount of capital invested by the
shareholders of the company then it is known as liquidating dividend. There are three main
approaches to dividends: residual, stability or a hybrid of the 2.

1.Residual Dividend Policy

Companies using the residual dividend policy value more highly to depend upon internally
generated equity to finance any new projects. As a result, dividend payments can begin of the
residual or leftover equity only 5 on balance project capital requirements are met. These companies
usually try to maintain balance in their debt/equity ratios before making any dividend
distributions, selecting dividends as long as there's enough money left over on balance operating
and expansion expenses are met. for instance, let's suppose that a corporation named CBC has
recently earned $1,000 and features a strict policy to take care of a debt/equity ratio of 0.5 (one part
debt to each two parts of equity). Now, suppose this company contains a project with a capital
requirement of $900. so as to take care of the debt/equity ratio of 0.5, CBC would should pay
money for one-third of this project by using debt ($300) and two-thirds ($600) by using equity. In
other words, the corporate would need to borrow $300 and use $600 of its equity to take care of the
0.5 ratio, leaving a residual amount of $400 ($1,000 - $600) for dividends. On the opposite hand, if
the project had a capital requirement of $1,500, the debt requirement would be $500 and also
the equity requirement would be $1,000, leaving zero ($1,000 - $1,000) for dividends. If any project
required an equity portion that was greater than the company's available levels, the corporate would
issue new stock. Typically, this method of dividend payment creates volatility within the dividend
payments that some investors find undesirable. The residual-dividend model relies on three key
pieces: an investment opportunity schedule (IOS), a target capital structure and a value of external
capital.

1. the primary step within the residual dividend model to line a target dividend pay-out ratio to
work out the optimal capital budget.

2. Then, management must decide the equity amount that needed to finance the optimal capital
budget and this could be only done primarily through retained earnings.

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3. The dividends are then paid out with the leftover ,and the residual, earnings. it is stated that the
employment of residual earnings and the model is understood because of the "residual-dividend
model." A primary advantage of the dividend-residual model is that with capital-projects budgeting,
the residual dividend model is beneficial in setting longer-term dividend policy. a major
disadvantage is that dividends is also unstable. Earnings from year to year can vary counting on
business situations. As such, it's difficult to take care of stable earnings and thus a stable dividend.
While the residual-dividend model is beneficial for longer-term planning, many firms don't use the
model in calculating dividends each quarter

2. Dividend Stability Policy

The fluctuation of dividends created by the residual policy significantly contrasts with the
understanding of the dividend stability policy. With the soundness policy, quarterly dividends are
set at a fraction of yearly earnings. This policy are reduces uncertainty to the investors and it
provides them with the income. Suppose our imaginary company, CBC, earned $1,000 for the year
(with quarterly earnings of $300, $200, $100 and $400). If CBC selected a stable policy of 10% of
yearly earnings ($1,000 x 10%), it'd pay $25 ($100/4) to shareholders quarterly. Alternatively, if
CBC selected a cyclical 6 policy, the dividend payments would adjust quarterly to be $30, $20, $10
and $40, respectively. In either instance, companies following this policy are always attempting to
share earnings with shareholders instead of looking for projects during which to take a position
excess cash.

3. Hybrid Dividend Policy

The ultimate approach may be a combination between the residual and stable dividend policy. Using
this approach, companies tend to look at the debt/equity ratio as a long-term instead of a short-term
goal. In today's markets, this approach is usually utilized by companies that pay dividends. As these
companies will generally experience trade cycle fluctuations, they're going to generally have one
set dividend, which is ready as a comparatively small portion of yearly income and might be easily
maintained. On top of this set dividend, these companies will offer another dividend paid only
income exceeds general levels.

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DIVIDEND POLICY

The term ‘dividend’ refers thereto portion of profit (after tax) which is distributed among the
owners/shareholders of the firm and also the profit which isn't distributed is understood as
retained earnings. Since dividend decision relates to the quantity and timing of any cash payments
made to the company's stakeholders, the choice is a crucial one for the firm because it may
influence its capital structure and stock price. additionally, the choice may determine the quantity
of taxation that shareholders should pay.
Dividends paid by the firms are viewed positively both by the investors and also the firms. The
firms which don't pay dividends are rated in oppositely by investors thus affecting the share price.
The folks that support relevance of dividends clearly state that regular dividends reduce
uncertainty of the shareholders i.e. the earnings of the firm is discounted at a lower rate, thereby
increasing the value. However, it’s exactly opposite within the case of increased uncertainty
because of non-payment of dividends.
Dividend policy of the firm is governed by:
i Long Term Financing Decision
ii Wealth Maximization Decision
Practical considerations in Dividend Policy
(a) Financial Needs of the Company
(b) Constraints on Paying Dividends
i. Legal
ii. Liquidity
iii. Access to the Capital Market
iv. Investment Opportunities

(c) Desire of Shareholders

(d) Stability of Dividends
i. Constant Dividend per Share
ii. Constant Percentage of Net Earnings
iii. Small Constant Dividend per Share plus Extra Dividend
(d) Form of Dividend: Dividends can be divided into following forms
i. Cash dividend
ii. Stock Dividend (Bonus shares)
Advantages:
(1) To Share Holders:
a. Tax benefit –At present there is no tax on dividend received.
b. Policy of paying fixed dividend per share and its continuation even after declaration of stock
dividend will increase total cash dividend of the shareholders in future.
(2) To Company:

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a. Conservation of cash for meeting profitable investment opportunities.
b. Cash deficiency and restrictions imposed by lenders to pay cash
dividend.
Limitations: Some of the limitations are:
(1) To Shareholders: Stock dividend does not affect the wealth of shareholders and therefore it
has no value for them. This is because the declaration of stock dividend is a method of capitalizing
the past earnings of the shareholders and is a formal way of recognizing earnings which the
shareholders already own.
(2) To Company: Stock dividends are more costly to administer than cash dividend
disadvantageous if periodic small stock dividends are declared by the company as earnings.
Types of Dividend Policies
There are many distinct dividend policies, but most policies represent one in all three categories.
A.) A stable dividend policy is characterized by the tendency to stay a stable dollar amount of
dividends per share from period to period.
Corporations tend to determine a predetermined target dividend payout ratio during which
dividends are only increased after the management is convinced that their future earnings will
support the higher amount of dividend payment. This policy, dividend the change in dividend will
normally lag behind earnings changes. Firms are reluctant towards the lower dividend payments,
even in times of financial constraints. Most firms follow a comparatively stable dividend policy
for four reasons:
1. Many business executives believe that stable dividend policies result in higher stock prices.
The empirical evidence on the connection between dividend policy and stock prices is
inconclusive.
2. Investors may view a very steady increasing in the dividends as more certain than a
fluctuating cash dividend payment.
3. there's less chance to signal erroneous informational content with a stable dividend
policy. Thus, firms tend to avoid reducing the annual dividend thanks to the knowledge
content that a dividend cut may Convey.
EXAMPLE: Americana Products, Inc. earned $4,000,000 last year and paid $1.40 per
share in dividends on 1,000,000 outstanding shares. thanks to a brief slump within the market,the
firm expects to earn $3,600,000 this year. If the corporate maintains a stable dividend policy, it
will maintain a $1.40 dividend per share, despite the expected decline in earnings.

B). A relentless dividend payout ratio policy is one during which a firm pays out a continuing
percentage of earnings as dividends. This policy is straightforward to administer once the firm
selects the initial payout ratio. A steady dividend payout policy will cause the dividends to be
unstable and unpredictable, if the earnings fluctuate. Few firms follow a continuing dividend
payout policy because stock prices could also be adversely full of highly volatile dividends.

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FACTORS AFFECTING DIVIDEND POLICY

1. Stability of Earnings: -

the character of business has a very important referring to the dividend policy. Industrial units
which have a stability of earnings may formulate more consistent dividend policy than those
having an uneven flow of incomes because they will predict easily their savings and earnings. The
enterprises which deal with the necessities suffer less from oscillating earnings than those dealing
in luxuries or goods.

2. Age of corporation: -

Age of the corporation counts much when deciding the dividend policy. A newly developed
company may always require much of earnings for expansion and management improvement and
will adopt a rigid dividend policy while, on the opposite hand, an older company can formulate a
transparent cut and more consistent policy regarding dividend.

3. Liquidity of Funds.

Availability of money and sound financial position is additionally a crucial factor in dividend
decisions. A dividend represents a cash outflow, the greater the funds and also the liquidity of the
firm the higher the power to pay dividend. The liquidity of a firm depends very much on the
investment and financial decisions of the firm which successively determines the speed of
expansion and therefore the manner of financing. If cash position is weak, dividend are going to
be distributed and if cash position is nice, company can distribute the cash dividend

4. Extent of share Distribution.

Nature of ownership also affects the dividend decisions. A closely held company is probably
going to induce the assent of the shareholders for the suspension of dividend or for following a
conservative dividend policy. On the opposite hand, a corporation having a good number of
shareholders cosmopolitan and forming low- or medium-income group, would face an excellent
difficulty in securing such assent because they'll emphasize to distribute higher dividend.

5. Needs for extra Capital.

Companies always use to retain a component of their profits to strengthen their financial position.
The income is also conserved for meeting the increased requirements of working capital or of
future expansion. Small companies usually find difficulties in raising finance for his or her needs
of increased capital for expansion programmes. They having no other alternative, use their
ploughed back profits. Thus, such Companies distribute dividend at low rates .

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6. Trade Cycles.

Business cycles also exercise an influence upon dividend Policy. Dividend policy is adjusted per
the business oscillations. During the boom, prudent management creates food reserves for
contingencies that follow the inflationary period. Higher rates of dividend are often used as a tool
for marketing the securities in an otherwise depressed market. The financial solvency are often
proved and maintained by the businesses in dull years if adequate reserves are built up

7. Government Policies.

The earnings capacity of the enterprise is widely tormented by the change in fiscal, industrial,
labour, control and other government policies. Sometimes the government restricts the
distribution of dividend beyond a specific percentage in a very particular industry or all told
spheres of commercial activity as was drained an emergency. The dividend policy of the company
has to be modified or formulated accordingly to those enterprises

8. Taxation Policy

High taxation levies tends to reduce the earnings of the companies and the rate of dividend are
decreased. Sometimes government levies dividend-tax of distribution of dividend beyond a
certain limit. It affects the capital formation India, dividends beyond ten percent of paid-up
capital are subject to dividend tax at seven point five percent

9. Legal Requirements.

when deciding on the dividend, the administrators take the legal requirements too into
consideration. so as to guard the interests of creditors an outsiders, the businesses Act 1956
prescribes certain guidelines in respect of the distribution and payment of dividend. Moreover, an
organization is required to supply for depreciation on its fixed and tangible assets before declaring
dividend on shares. It proposes that Dividend shouldn't be distributed out of capita, in any case.
Likewise, contractual obligation should even be fulfilled, as an example, payment of dividend on
preferred stock in priority over ordinary dividend.

10. Past dividend Rates.

While formulating the Dividend Policy, the administrators must confine mind the dividend paid in
past years. this rate should be round the average past rat. If it has been abnormally increased the
shares are subjected to speculation. in an exceedingly new concern, the company should consider
the dividend policy of the rival organization.

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11. Ability to Borrow

Well established and huge firms have better access to the capital market than the new Companies
and should borrow funds from the external sources if there arises any need. Such Companies may
have a much better dividend pay-out ratio. Whereas smaller firms should depend on their internal
sources and so they're going to need to built up good reserves by reducing the dividend disburse
ratio for meeting any obligation requiring heavy funds.

12. Policy of Control.

Policy of control is another determining factor is to date as dividends are concerned. If the
administrators want to possess control on company, they might not prefer to add new shareholders
and so, declare a dividend at low rate. Because by adding new shareholders they fear dilution of
control and diversion of policies and programmes of the prevailing management. so that they
choose to meet the wants through retained earing. If the administrators don't bother about the
control of affairs, they're going to follow a liberal dividend policy. Thus, control is an influencing
consider framing the dividend policy

13. Repayments of Loan.

A corporation having loan indebtedness are vowed to a high rate of retention ratios, unless and
until some other arrangements are made regarding redemption of debt on maturity. it'll naturally
lower down the speed of dividend. Sometimes, the lenders (mostly institutional lenders) they put
some restrictions regarding the dividend distribution still such time their loan is outstanding.
Formal loan contracts generally provide a particular standard of liquidity and solvency to be
maintained. Management is guaranteed to hour such restrictions and to limit the speed of dividend
payout.

14. Time for Payment of Dividend.

When should be the dividend to be paid is another consideration. Payment of dividend means
outflow of money. It is, therefore, desirable to distribute dividend at a time when is least needed
by the corporate because there are peak times likewise as lean periods of expenditure. Wise
management should plan the payment of dividend in such a fashion that there is no cash outflow
at a time when the undertaking is already in need of urgent finances.

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15. Regularity and stability in Dividend Payment.

Dividends should be paid regularly because each investor is inquisitive about the payment of
dividend. The management should, inspite of regular payment of dividend, consider that the speed
of dividend should be all the foremost constant. For the purpose companies use to maintain
dividend equalization Fund.

1.2 Sectoral growth last few years – Industry Trend

1) BANKING SECTOR

(Source: IBEF. (n.d.). https://www.ibef.org/industry/banking-india.aspx. )

The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46
foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural
cooperative banks additionally to cooperative credit institutions. As of September 2020, the
whole number of ATMs in India increased to 210,049 and is further expected to increase to
407,000 by 2021.
Asset of public sector banks stood at Rs. 107.83 lakh crore (US$ 1.52 trillion) in FY20.
During FY16-FY20, bank credit grew at a CAGR of three.57%. As of FY20, total credit
extended surged to US$ 1,698.97 billion.
During FY16-FY20, deposits grew at a CAGR of 13.93% and reached US$ 1.93 trillion by
FY20. Credit to non-food industries stood at Rs. 103.46 trillion (US$ 1.40 trillion) as of
November 20, 2020.

2) NON-BANKING SECTOR

NBFCs have come a protracted way in terms of their scale and variety of operations.
They now play a critical role in financial intermediation and promoting inclusive growth
by providing last-mile access of economic services to satisfy the diversified financial needs
of less-banked customers. Over the years, the segment has grown rapidly, with a few

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of the massive NBFCs becoming comparable in size to a number of the private sector banks.
The sector has also seen advent of the many non-traditional players leveraging technology
to adopt tech-based innovative business models

Market Size

Between March 31, 2009 and March 31, 2019, the total assets of NBFCs grew

at a compounded annual growth rate (CAGR) of 18.6 per cent, while the balance sheets of
scheduled commercial banks (SCBs) grew at a CAGR of 10.7 per cent. Consequently, the
aggregate balance sheet size of NBFCs increased from 9.3 per cent to 18.6 per cent of the
aggregate balance sheet size of SCBs during the corresponding period. In absolute terms, the asset
size of NBFC sector (including HFCs), as on March 31, 2020, is Rs.51.47 lakh crore3 As at end-
March 2020, NBFCs have been the largest net borrowers of funds from the financial system, of
which, more than half of the funds were from SCBs, followed by Asset Management Companies-
Mutual Funds (AMC-MFs) and Insurance Companies. As the financial intermediation has shifted,
so has interconnectedness. Many NBFCs now rely on banking system for funds and emergency
liquidity needs. Therefore, it is not enough to understand and confront the vulnerabilities of the
banking sector alone. The need of the hour is to understand

vulnerabilities in the NBFC sector and how shocks are transmitted to or from the sector.

(Source: NBFC growth report)

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3) AUTOMOTIVE SECTOR

India became the fourth largest auto market in 2019 displacing Germany with about 3.99 million
units sold within the passenger and commercial vehicles categories. India is anticipated to
displace Japan because the third-largest auto market by 2021. The two-wheeler segment
dominates the market in terms of volume as a result of a growing socio-economic class and a
young population.
Moreover, the growing interest of the businesses in exploring the agricultural markets further
aided the expansion of the world. India is additionally a prominent auto exporter and has strong
export growth expectations for the near future. additionally, several initiatives by the govt of India
and major automobile players within the Indian market are expected to create India a pacesetter
within the two-wheeler and four-wheeler market within the world by 2020.
Market Size
Domestic automobiles production increased at 2.36% CAGR between FY16-20 with 26.36
million vehicles being manufactured within the country in FY20. Overall, domestic automobiles
sales increased at 1.29% CAGR between FY16-FY20 with 21.55 million vehicles being sold in
FY20. Two-wheelers and passenger vehicles dominate the domestic Indian auto market. car sales
are dominated by small and mid-sized cars. Two-wheelers and passenger cars accounted for
80.8% and 12.9% market share, respectively, accounting for a combined sale of over 20.1 million
vehicles in FY20. Passenger vehicle (PV) sales stood at 3,10,294 units in October 2020, compared
with 2,71,737 units in October 2019, registering a 14.19% growth. As per the Federation of
Automobile Dealers Associations (FADA), PV sales in November 2020 stood at 2,91,001 units,
compared with 2,79,365 units in November 2019, registering a 4.17% growth. Overall,
automobile export reached 4.77 million vehicles in FY20, growing at a CAGR of 6.94% during
FY16-FY20. Two-wheelers made up 73.9% of the vehicles exported, followed by passenger
vehicles at 14.2%, three-wheelers at 10.5% and commercial vehicles at 1.3%. EV sales, excluding
E-rickshaws, in India witnessed a growth of 20% and reached 1.56 lakh units in FY20 driven by
two-wheelers. Premium motorbike sales in India recorded a seven-fold jump in domestic sales,
reaching 13,982 units during April-September 2019. The sale of luxury cars stood between 15,000
to 17,000 within the first six months of 2019.

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 (Source:IBEF. (n.d.). https://www.ibef.org/industry/india-automobiles.aspx.)
4) IT SECTOR
The global sourcing market in India continues to grow at a better pace compared to the IT-BPM
industry. India is that the leading sourcing destination across the globe, accounting for about 55%
market share of the US$ 200-250 billion global services sourcing business in 2019-20. Indian IT
& BPM companies have founded over 1,000 global delivery centres in about 80 countries across
the planet
India has become the digital capabilities hub of the globe with around 75% of worldwide digital
talent present within the country.
IT-BPM industry’s revenue was estimated at around US$ 191 billion in FY20, growing at 7.7% y-
o-y. it's estimated to reach US$ 350 billion by 2025. Moreover, revenue from the digital segment
is anticipated to form 38% of the total industry revenue by 2025. Digital economy is estimated to
achieve Rs. 69,89,000 crore
(US$ 1 trillion) by 2025. The domestic revenue of the IT industry was estimated at US$ 44 billion
and export revenue was estimated at US$ 147 billion in FY20. Total number of employees grew
to 1.02 million cumulatively for four Indian IT majors (including TCS, Infosys, Wipro, HCL
Tech) as on day, 2019. Indian IT industry employed 205,000 new hires, up from the 185,000 jobs
added in FY19 and had 884,000 digitally skilled talents in 2019.

(Source:IBEF. (n.d.). https://www.ibef.org/industry/information-technology-india.aspx. )

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5) FMCG

The fast-moving commodity (FMCG) sector is India’s 4th-largest sector with household and
private care accounting for 50% of FMCG sales in India. Developing mindfulness, simpler
access and changing ways of life are the key development drivers for the world. The urban
segment (accounts for a revenue share of around 55%) is that the largest contributor to the
general revenue generated by the FMCG sector in India. However, within a previous couple
of years, the FMCG market has grown at a faster pace in rural India compared to urban India.
Semi-urban and rural segments are growing at a rapid pace and FMCG products account for
50% of the entire rural spending.

Market Size
The retail market in India is estimated to succeed in US$ 1.1 trillion by 2020 from US$ 840
billion in 2017, with modern trade expected to grow at 20 25% once a year, which is
probably going to spice up the revenue of FMCG companies. Revenue of FMCG sector
reached Rs. 3.4 lakh crore (US$ 52.75 billion) in FY18 and is estimated to succeed in US$
103.7 billion in 2020. FMCG market is predicted to grow at 9-10% in 2020. The rise in rural
consumption will drive the FMCG market. It contributes around 36% to the general FMCG
spending. within the third quarter of FY20 in rural India, FMCG witnessed a double-digit
growth recovery of 10.6% Due to various government initiatives (such as packaged staples
and hygiene categories); high agricultural produce, reverse migration and a lower percentage.

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1.3 Govt Policies/Regulation of the Sector
1. OBJECTIVE

1.1. This memorandum seeks approval of the Board to provide an option to the listed companies
for distribution of cash benefits through the depositories in addition to the present system of
distribution either directly by them or through Registrar to an issue and/or Share Transfer Agents.

2. BACKGROUND

2.1.For investments in various securities, investors receive cash benefits such as dividend, interest
and redemption payments. At present “Schedule I” read with Regulation 12 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), provides that
dividends can be distributed by the listed entity either directly or through their Registrar to an Issue
and/or Share Transfer Agent. (RTAs/STAs).

2.2In India, although the distribution of non-cash benefits such as bonus, rights, amalgamations,
demergers, sub-division etc. are handled with the help of depositories, cash benefits are handled
outside their depository system. Depositories provide details of shareholders and bondholders
including name, address and bank details to the respective issuer companies which, in turn, arrange
for distribution of cash benefits directly or through RTAs/STAs.

2.3. .NSDL proposed to SEBI that distribution of cash benefits and redemption proceeds be allowed
through depositories. NSDL submitted that world over, in most developed markets and several
emerging markets, depositories usually distribute cash benefits to their accountholders including
dividend on equity and preference shares, interest and maturity proceeds on debt instruments, etc.
In our country, however the distribution of cash benefits has evolved differently. Although non-
cash benefits such as bonus, rights etc. are handled through depositories and cash benefits are
handled outside the depository system. Issuer Page 2 of 12 companies arrange for distribution of
cash benefits by obtaining information from the depositories.

2.4.However, there is restriction on listed companies availing services of depositories for

distribution of cash benefits as per Listing Regulations. Considering the stronger governance
structure of depositories and also that the distribution of cash benefits through depositories is
adjacent to the activities currently carried by them, SEBI has no objection to amend the Listing
Regulations in the investors’ interest.

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 3. BENEFITS OF THE PROPOSED CHANGE

3.1.Benefits to the investors: Currently if a listed entity avails the facility of depositories for
cash benefit distribution it is expected to lead to shorter turnaround time for receiving cash
benefits by investors. Further, investor will get a consolidated statement of all the cash benefits
due to them and credited, along with all details such as announcement date, dividend rate, amount
due, date of credit to bank account, bank transaction reference, etc. which would facilitate in
simplified monitoring and better reconciliation. Investors can also receive alerts (SMS/emails
etc.) from the depositories as like in case of other transactions.

3.2. Benefits to the Issuers: The issuer need not maintain separate infrastructure for cash benefit
transfers. This will result in economies of scales and also availability of consolidated information
sent across to investors at a single place. As data is available in depository system, reconciliation
will be simplified and automated for the issuers. Page 3 of 12

4. PRESENT REGULATORY FRAMEWORK 4.1.Present regulatory framework provides the

following:

4.1.1. Section 26 of the Depositories Act, 1996 allows depositories to make byelaws with
regard to the manner of distribution of dividend, interest and monetary benefits received from the
company among beneficial owners.

4.1.2. Companies Act, 2013 casts responsibility on the company to distribute dividend to its
shareholders. However, it was not specified that the company should avail the services of
RTAs/STAs for the distribution of dividend. Hence, in the absence of any specific provision in
the Companies Act, 2013 a company has discretion to choose either depositories or RTA for the
distribution of dividend.

4.1.3. However, clause 1 of Schedule I of Regulation 12 of Listing Regulations provides that the
listed entity either directly or through their Registrar to an Issue and/or Share Transfer Agent,
shall use electronic clearing services (local, regional or national), direct credit, real time gross
settlement, national electronic funds transfer etc. for making payment of dividend/interest on
securities issued/redemption or repayment amount.

4.2.Thus, as per Listing Regulations, there is restriction on listed companies availing services of
depositories for distribution of cash benefits. Hence, considering the benefits of transferring of
cash benefits through depository, in the interest of investors the companies may be given an

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option to distribute cash benefits through depositories along with present system of distribution of
cash benefits either directly or through RTAs/STAs.

5. AMENDMENTS TO REGULATIONS/CIRCULARS 5.1.Relevant regulations/circulars may

be suitably modified to provide an option to the listed companies for distribution of cash benefits
through the depositories Page 4 of 12 in addition to the present system of distribution either
directly by them or through Registrar to an issue and/or Share Transfer Agents, using electronic
clearing services (local, regional or national), direct credit, real time gross settlement, national
electronic funds transfer etc. for making payment of dividend/interest on securities
issued/redemption or repayment amount.

6.1. The Board is requested to consider and approve the proposal at para 5.1 above.

6.2. The Board is also requested to authorize the Chairman to take consequential and incidental
steps to give effect to the decision of the Board.

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1.4 Overview of the Company
BANKING SECTOR

1) ICICI BANK
Introduction of ten companies which is subject of my study ICICI Bank ICICI Bank Ltd.,
incorporated within the year 1994, could be a depository financial institution (having a market cap
of Rs 226638.73 Crore). ICICI Bank is India's largest private sector bank by consolidated assets.
The bank's consolidated total assets stood at US$ 156.8 billion as on 30 September 2017. The
bank and their subsidiaries offer a good range of banking and financial services including
commercial banking, retail banking, project and including abcdefghi
company finance, assets finance, insurance, working capital and personal equity, investment
banking, broking and treasury products and services. they provide through a spread of delivery
channels and thru their specialized subsidiaries within the areas of investment banking, life and
non-life insurance, risk capital and asset management.

ICICI Bank had a network of 4,856 branches and 13,792 ATMs as on 30 September 2017. ICICI
Bank is present across 17 countries, including India. The bank's equity shares are listed in India
on Bombay stock market and also the National exchange of India Limited and their American
Depositary Receipts (ADRs) are listed on the the big apple securities market. The bank is that
the first Indian Bank listed on Ny exchange. ICICI Bank Ltd was incorporated within the year
1994 as part of the ICICI group with the name ICICI Banking Corporation Ltd. The initial equity
capital was owned 75% by ICICI and 25% by SCICI Ltd, a diversified finance and shipping
finance lender of which ICICI owned 19.9% at December 1996. Pursuant to the merger of SCICI
into ICICI, ICICI Bank became a wholly-owned subsidiary of ICICI. In September 10, 1999, the
name of the Bank was changed from ICICI Banking Corporation Ltd to ICICI Bank Ltd ICICI
Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion ($91 billion) at March
31, 2011 and profit after tax Rs. 51.51 billion ($1,155 million) for the year ended March 31, 2011.
The Bank incorporates a network of two,535 branches and 6,810 ATMs in India, and contains
a presence in 19 countries, including India.

ICICI Bank offers a good range of banking products and financial services to corporate and retail
customers through a spread of delivery channels and thru its specialized subsidiaries within
the areas of investment banking, life and non-life insurance, capital and asset management. The
Bank currently has subsidiaries within the UK, Russia and Canada, branches in us, Singapore,
Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative

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offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and
Indonesia. Their UK subsidiary has established branches in Belgium and Germany. ICICI Bank's
equity shares are listed in India on Bombay exchange and therefore the National securities
market of India Limited and its American Depositary Receipts (ADRs) are listed on the ny stock
market (NYSE). 14 Services offered by the company: NRI Services Internet and mobile banking
Money Transfer Deposits Bank Accounts Loans Investment Cards Home Loans Investments &
Insurance Insurance Demat Loans against FD ICICI Bank Ltd. key Products/Revenue Segments
include Interest & Discount on Advances & Bills which contributed Rs 40866.21 Crore to Sales
Value (74.34 you look after Total Sales), Income From Investment which contributed Rs
11568.17 Crore to Sales Value (21.04 you look after Total Sales), Interest which contributed Rs
1868.14 Crore to Sales Value (3.39 you look after Total Sales) and Interest On Balances with RBI
and Other Inter-Bank Funds which contributed Rs 663.38 Crore to Sales Value (1.20 you look
after Total Sales)for the year ending 31-Mar-2018. The Bank has reported a Gross Non-
Performing Assets (Gross NPAs) of Rs .00 Crore (.00 you look after total assets) and Net Non-
Performing Assets (Net NPAs) of Rs .00 Crore (.00% of total assets). For the quarter ended 31-
03-2018, the corporate has reported a Consolidated Interest Income of Rs 11310.56 Crore, up
4.27 to stand proud of half-moon Interest Income of Rs 10846.94 Crore and up 6.85 to stand
proud of last year same quarter Interest Income of Rs 10585.33 Crore. The bank has
reported net after tax of Rs 1470.92 Crore in latest quarter.

2) AXIS BANK

Axis Bank Ltd., incorporated within the year 1993, maybe a bank (having a market cap of Rs
180713.85 Crore). Axis Bank is that the third-largest private sector bank in India. The Bank
operates in 4 segments, namely treasury, retail banking, corporate/ wholesale banking and other
banking business. The treasury operations include investments in sovereign and company debt,
equity and mutual funds, dealings, derivative trading and interchange operations on the account,
and for patrons and central funding. Retail banking incorporates loaning to people/private
companies subject to the direction, item and granularity model. It also includes liability products,
card services, Internet banking, machine machines (ATM) services, depository, financial advisory
services, and non-resident Indian (NRI) services. The corporate/wholesale banking segment
includes corporate relationships not included under retail banking, corporate advisory services,
placements and syndication, management of public issue, project appraisals, capital market-related
services, and cash management services. 15 The Bank's registered office is found in Ahmedabad
and their home base is found in Mumbai. With 3,485 domestic branches (including extension

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counters) and 14,332 ATMs across the country as of 30 September 2017, the network of Axis Bank
spreads across 2,033 cities and towns, enabling the bank to achieve bent an oversized cross-section
of shoppers with an array of products and services. The bank also has 9 overseas offices with
branches in Singapore, Hong Kong, Dubai (at the DIFC), Shanghai and Colombo; representative
offices in Dubai, Abu Dhabi and Dhaka and a far off subsidiary in London, UK. The Bank has five
wholly-owned subsidiaries namely Axis Securities and Sales Ltd, Axis Private Equity Ltd, Axis
Trustee Services Ltd, Axis Asset Management Company Ltd and Axis fund Trustee Ltd. Axis Bank
was incorporated within the year 1993 with the name UTI Bank Ltd.
Axis Bank is one altogether the first new generation private sector banks to possess begun
operations in 1994. The bank was promoted in 1993, jointly by Specified Undertaking of investment
trust of India (SUUTI) (then mentioned as an investment company of India), insurance Corporation
of India (LIC), General Insurance Corporation of India (GIC), social welfare Company Ltd., The
New India Assurance Company Ltd., The Oriental insurance company Ltd. and United India insurer
Ltd. The shareholding of the unit venture organization of India was along these lines moved to
SUUTI, a substance set up in 2003. Axis Bank on 27 July 2017 announced that it's entered into an
agreement with Jasper Infotech Private Limited to accumulate a 100% stake in its subsidiaries viz.
Free Charge Payment Technologies Private Limited and Accelyst Solutions Private Limited, which
together constitute the digital payments business under the 'Free Charge' brand. The deal marked
the first acquisition of a digital payments company by a bank in India. Axis Bank entered a deal in
November 2010 to buy for the investment banking and equities units of Enam Securities for $456
million. Axis Securities, the equities arm of Axis Bank, will merge with the investment banking
business of Enam Securities. As per the deal, Enam will demerge its investment banking,
institutional equities, retail equities and distribution of economic products, and non-banking finance
businesses and merge them with Axis Securities. The Bank has strengths in both retail and company
banking and is committed to adopting the foremost effective industry practices internationally so
on attain excellence.
Axis Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills
which contributed Rs 34137.47 Crore to Sales Value (74.56 you take care of Total Sales), Income
From Investment which contributed Rs 9983.30 Crore to Sales Value (21.80 you take care of Total
Sales), Interest On Balances with RBI and Other Inter-Bank Funds which contributed Rs 1271.71
Crore to Sales Value (2.77 you take care of Total Sales) and Interest which contributed Rs 387.83
Crore to Sales Value (0.84 you take care of Total Sales)for the year ending 31-Mar-2018. 16 The
Bank has reported Gross Non-Performing Assets (Gross NPAs) of Rs 30854.67 Crore (5.75 you
take care of total assets) and Net Non-Performing Assets (Net NPAs) of Rs 12233.29 Crore (2.36%

24 | P a g e
 of total assets). For the quarter ended 31-12-2018, the company has reported a Standalone Interest
Income of Rs 10628.25 Crore, up 6.76 to face pleased with half-moon Interest Income of Rs
9954.99 Crore and up 21.22 to face out from last year same quarter Interest Income of Rs 8767.57
Crore. The bank has reported a net after tax of Rs 1680.85 Crore within the latest quarter.

NBFC SECTOR

1) Housing Development Finance Corporation Limited

(HDFC) is India's premier housing nondepository financial organization. The company's main
business is to supply loans for the acquisition or construction of residential houses. As of the top of
September 2017, HDFC's distribution network comprised 439 outlets including 135 offices of
HDFC's distribution company, HDFC Sales Private Limited (HSPL). HDFC covers additional
locations through its outreach programs. Distribution channels structure an essential piece of the
appropriation network with home credits being conveyed through HSPL, HDFC Bank and outsider
direct selling partners. the company also has offices in Dubai, London and Singapore and repair
associates within the countryside, to provide housing loans and property advisory services to non-
resident Indians (NRIs) and persons of Indian origin (PIOs).
HDFC's item range incorporates advances for buy and development of a private unit, acquisition of
land, home improvement advances, home extension loans, non-residential premises loans for
professionals and loan against property, while its flexible repayment options include accelerating
Repayment Facility (SURF) and versatile Loan Instalment Plan 3(FLIP). The company's
subdivision includes HDFC Developers Ltd, HDFC Investments Ltd, HDFC Holdings Ltd, HDFC
Trustee Company Ltd, HDFC Realty Ltd, HDFC Property Ventures Ltd, HDFC Sales Pvt Ltd,
HDFC Ventures Trustee Company Ltd, HDFC capital Ltd, HDFC Ergo General underwriter Ltd,
HDFC Standard insurance firm Ltd, GRUH Finance Ltd, HDFC Asset Management Company Ltd
and HDFC Bank Ltd. development Finance Corporation Ltd was incorporated within the year 1977.
The Corporation is established with the primary objective of meeting a social need that of promoting
homeownership by providing long-term finance to households for his or her housing needs. the
company was promoted with an initial share capital of Rs. 100 million. Housing development
Finance Corporation Limited (HDFC Ltd.) was set up in 1977 with the primary objective of meeting
a social need of encouraging homeownership by providing long-term finance to households. Over
the last three decades, HDFC has turned the concept of housing finance for the growing class in
India into a world-class enterprise with a superb reputation for professionalism, integrity and
impeccable service. 17 A pioneer and leader in housing finance in India, since its inception, HDFC

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has assisted quite 38 lakhs customers to possess a home of their own, through cumulative housing
loan approvals of over Rs 3.73 trillion and disbursements of over Rs 3.02 trillion as at March 31,
2011. HDFC incorporates a good network of 351 offices (which includes 91 offices of HDFC's
wholly-owned distribution company HDFC Sales Private Limited) catering to over 2,400 towns &
cities spread across the country. It also has offices in Dubai, London and Singapore and repair
associates within the geographical area region, to supply housing loans and property advisory
services to Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs).
HDFC's unrelenting consider Corporate Governance, high standards of ethics and clarity of vision,
percolate through the organization. Trust, Integrity, Transparency and Professional Service are the
significant mainstays of the brand HDFC and above all, individuals - the two representatives and
clients - are its image diplomats. Customer satisfaction is that the hallmark of all HDFC offerings.
the first touch of HDFC's personalized service begins as soon as a customer approaches HDFC, and
over time it progresses into an extended and meaningful relationship. State-of-the-art information
systems supported by strong in-house training programmes conducted at its specialized training
centre in Lonavla, have equipped HDFC to reply swiftly to the ever-changing customer needs and
thereby allow customers to making the right home buying decision. this will be what sets apart
HDFC's customer service philosophy - 'With You, Right Through'. HDFC's specialist team of over
1,600 trained and experienced professionals follow a 'single-window concept' for providing smooth
and value-added services within the least bit stages. The team guides the purchasers everywhere
the entire process of property purchase - be it property search assistance, technical support before
finalizing the property, legal advice on property related documentation, personalized home equity
credit counselling or providing tailor-made repayment options to suit the customer's specific
requirements.HDFC's wide item range includes loans for purchase and construction of a residential
unit, purchase of land, home improvement loans, home extension loans, non-residential premises
loans for professionals and loan against property, while its flexible repayment options include
accelerating Repayment Facility (SURF) and versatile Loan Instalment Plan (FLIP).
HDFC also includes a strong deposits mobilization programme. HDFC has been ready to mobilize
deposits from over 10 lakh depositors. Outstanding deposits grew significantly from Rs 1,458 crores
in March 1994 to Rs 24,625 crores in March 2011. additionally, HDFC has received 'AAA' rating
for its Deposit products for highest safety from both CRISIL and ICRA for sixteen consecutive
years. Over the years, HDFC has emerged as a financial conglomerate with its presence within the
whole gamut of economic services including banking, insurance (life and non-life), asset
management, assets capital and more recently education loans. Today, HDFC is recognized
mutually of the only Managed Companies in India and perhaps a model housing nondepository

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financial organization for developing countries with nascent 18 housing finance markets. HDFC
has embraced a few consultancy tasks in different nations across Asia, Africa and East Europe to
help and set up their lodging account foundations.
At HDFC, 'Corporate Social Responsibility has always been an evolving concept, like its 'learning
by doing philosophy. As a neighborhood of its social objectives, HDFC has always endeavored to
contribute to economic development and social upliftment of the weaker sections of society and has
professionally nurtured each of its social initiatives as an investment. HDFC has undertaken
development-oriented work and supported several social initiatives within the areas of education,
child welfare, medical research, welfare for the elderly and also the handicapped among several
others. HDFC is how many Indian families spell the word 'Home' because the brand not only offers
Housing Finance but also Total Housing solutions.

2) INDIABULLS HOUSING FINANCE LIMITED.

Indiabulls Housing Finance Ltd (IBHFL) was amalgamated on May 10, 2005. the company
provides home loans and loans against property. They additionally offer plot credits and advances
against private, business, and investment property. the organization is settled in New Delhi. the
company is engaged within the business of providing finance to persons, the body of individuals,
companies, institutions, firms, builders, contractors etc., for construction, erection, building, repair,
remodeling, development, improvement, purchase etc; to make, to need on a lease, purchase or
acquire in any manner whatsoever any apartments, houses, flats, bungalows, township, rooms etc,
to carry on the business of economic advisors and consultants on its own or jointly with others. On
December 28, 2005, the company was registered to carry on to the business of a Housing Finance
Institution but doesn't have permission from the National Housing Bank to only accept public
deposits. In 2016, Indiabulls Housing Finance announced that it'd invest ₹1 billion (US$14 million)
in innovative technology platforms. the identical year it became the first mortgage company to end
end-to-end digitization of loan sanctions in India. the company busy with the Centre for
Development of Advanced Computing and thus the Unique Identification Authority of India to
provide e-signing using PAN and Aadhar numbers. The home loan arrangements endorsed through
this course as put away carefully in NSDL storehouse member accounts. It additionally has an
application on Facebook, IB Easy which encourages advanced applications through online media.
Indiabulls Housing Finance bought a 40% stake in London, the United Kingdom based Oak North
Bank for £66 million in 2015, making it the most important shareholder within the bank founded
by entrepreneur Rishi Khosla and specializes in lending to small businesses. the company also

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includes a branch office in Dubai, United Arab Emirates. It provides loans to Non-Resident Indians
based in UAE to buy properties in India. Indiabulls Housing Finance was recognized because the
Fastest Growing Housing non-depository financial organization of the Year 2013-14 by
NAREDCO. In 2015, the company was awarded Best Housing non-depository financial
organization by Realty Plus yet as Best Affordable Housing non-depository financial organization
of the Year by ASSOCHAM. 19 India bulls Housing Finance Ltd. (IBHFL) is India’s 2nd largest
housing no depository financial organization, regulated by the National Housing Bank (NHB). the
company encompasses a record size of ₹ 1.39 trillion as of 30th September 2018 and cumulatively
disbursed loans of over ₹ 2.15 trillion. E-Home Loans – India’s first completely online home equity
credit fulfilment platform was launched IBHFL. the company could also be a neighborhood of the
Nifty50, MSCI and FTSE4Good indexes, and was rated the 13th largest consumer non-depository
financial organization worldwide by Forbes Global 2000 in June 2018.

AUTOMOTIVE SECTOR

1) MAHINDRA & MAHINDRA LIMITED

Mahindra & Mahindra Ltd (M&M) is an Indian company. the company operates in 9 segments
automotive segment comprises sales of automobiles, spare parts and related services; farm
equipment segment comprises sales of tractors, spare parts and related services; information
technology (IT) services comprise services rendered for IT and telecom; financial services comprise
of services regarding financing, leasing and hire purchase of automobiles and tractors; steel trading
and processing comprises of trading and processing of steel; infrastructure comprises of operating
of business complexes, project management and development; hospitality segment comprises of
sale of timeshare; Systech segment involves car segments and other related items and
administrations, and its others section contains logistics, after-market, two-wheelers and
investment. Mahindra and Mahindra Ltd were consolidated on October 2, 1945, with the name
Mahindra and Mohammed Ltd. the company was renamed as Mahindra & Mahindra Ltd within the
year 1948. The steel exchanging business was started in a relationship with providers in the UK.
within the year 1950, the company commenced the first business with Mitsubishi Corporation and
5000 tons of wagon building plates from Yawata Iron & Steel were supplied.
The Board of Directors of M&M at its meeting remained 10 November 2017 recommended issue
of bonus equity shares in proportion of 1:1. On 30 January 2018, M&M's Farm Equipment unit
announced the acquisition of a 26% equity stake in M.I.T.R.A. Agro Equipment Pvt Ltd (MITRA),
a Maharashtra-based AgTech company that designs and manufactures proprietary sprayers for

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horticulture crops. M&M will acquire a 26% equity stake in MITRA through a fresh infusion of
capital into the company. As a component of a series of initiatives under its digital transformation
strategy, M&M on 31 January 2018 announced an industry-first initiative within the automotive
retail space with the launch of its 'Bring the Showroom Home', a transportable, mobile-based,
interactive video game experience. On 2 February 2018, Mahindra First Choice Wheels (MFCWL),
a diversified used vehicle automotive services provider, announced that it's raised a fresh round of
$15 million (Rs 100 crore). the entire investment is within the type of primary capital and may be
used to fund its growth over the next 18 months and values the company at $250 million pre-money
and $265 million post-money.
The business area of the company spreads to twenty Automotive sectors the company manufactures
& markets utility vehicles, light commercial vehicles that feature three-wheeler vehicles namely;
Scorpio, Bolero, Champion and much more. the company also exports its products to several
countries in Europe, Africa, South America, South Asia and also the geographic area. M&M
incorporates a holdup with Renault for the assembly & marketing of Logan. Mahindra International
is into producing trucks and buses. the company has entered into a venture with Navistar for the
assembly of diesel engines & trucks. Farm equipment M&M's farm equipment segment features a
presence in six continents and incorporates a worldwide network of 800 dealers. Its total combined
production capacity is 1,50,000 tractors a year from countries like India, the USA, China and
Australia. the company is additionally into agro-business. Trade, Retail & Finance Mahindra’s
Intertrade Division provides steel & steel-related services. It offers steel raw materials, metals,
ferroalloys, etc. It also advances Cold Rolled Grain Oriented (CRGO) and Cold Rolled Non-Grain
Oriented (CRNGO) steels that are required for transformers & compressors. Mahindra Retails is
into the distribution business and has traffic jam with big names like Lego, Disney, Mattel et al.
Mahindra Finance is into the financing of tractors and other vehicles and is additionally into
Insurance broking. Infrastructure M&M has also entered Infrastructure development that operates
in real estates, SEZs, hospitality, project engineering and elegance.
Under this, it's created Mahindra Holiday & Resorts, Mahindra Lifespaces & Mahindra World City.
Tech Mahindra provides solutions & services to telecommunication majors namely Alcatel, AT&T,
BT, Convergys, Ericsson and O2, among others. it is also into business process and technology
consulting services through Bristle. Systech it's into the availability of automotive components. It
produces forged and forged/machined components, gears and composites. Speciality Business 21
Under this division it's companies like Mahindra Defence, engaged in manufacturing defence
related vehicles & Mahindra Ashtech.

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2) Maruti Suzuki India Limited (formerly Maruti Udyog Ltd)
It is India's largest railcar company, accounting for over 50 per cent of the domestic car market. the
corporate offers full range of cars from entry level Maruti Alto to stylish hatchback Ritz, A-star,
Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. the
corporate may be a subsidiary of Suzuki Motor Corporation of Japan. the Japanese car major held
a 56.21% stake in Maruti Suzuki as of 31 December 2017. the corporate is engaged within the
business of producing, purchase and sale of automobiles and spare parts (automobiles). the opposite
activities of the corporate include facilitation of pre-owned car sales, fleet management and car
financing. they need four plants, three located at Palam Gurgaon Road, Gurgaon, Haryana and one
located at Manesar Industrial Town, Gurgaon, Haryana. the corporate has nine subsidiary
companies, namely Maruti Insurance Business Agency Ltd, Maruti Insurance Distribution Services
Ltd, Maruti Insurance Agency Solutions Ltd, Maruti Insurance Agency Network Ltd, Maruti
Insurance Agency Services Ltd, Maruti Insurance Agency Logistics Ltd, True Value Solutions Ltd,
Maruti underwriter Ltd and J J Impex (Delhi) Pvt Ltd. Maruti Suzuki India Ltd was joined on
February 24, 1981, with the name Maruti Udyog Ltd. the corporate, was formed as a government
company, with Suzuki as a minor partner, to form a people's car for socio-economic class India.
Over the years, the company's product range has widened, ownership has changed hands and also
the customer has evolved. In October 2, 1982, the corporate signed the license and venture
agreement with Suzuki Motor Corporation, Japan. within the year 1983, the corporate started its
productions and launched Maruti 800. within the year 1984, they introduced Maruti Omni and
through the following year, they launched Maruti Gypsy within the market. within the year 1987,
the corporate forayed into the foreign market by exporting the first lot of 500 cars to Hungary.
within the year 1990, the corporate launched India's first three-box car, Sedan. within the year 1992,
Suzuki Motor Corporation, Japan increased their stake within the company to 50%. within the year
1993, they introduced the Maruti Zen and within the next year, they launched Maruti Esteem within
the market. within the year 1995, the corporate commenced its second plant. within the year 1997,
they started Maruti Service Master as a model workshop in India to appear after-sales services.
within the year 1999, the third plant with new press, paint and assembly shops became operational.
within the year 2000, the corporate launched Maruti Alto within the market. On 18 May 2016,
Maruti Suzuki announced the launch of an updated version of its small car Alto 800 with a more
attractive front design, fresh interiors, vibrant colours, higher fuel efficiency and new features. 22
On 27 May 2016, Maruti Suzuki declared that it'll proactively and deliberately review 75,419
Baleno vehicles(petrol and diesel) manufactured between 3 August 2015 and 17 May 2016 to
upgrade the airbag controller software. Of these, 15,995 Baleno diesel cars manufactured between

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3 August 2015 and 22 March 2016 also will be attended to for inspection and replacement of a
faulty filter. The Baleno cars covered within the recall include 17,231 units of exports. additionally,
1,961 DZire diesel cars (only AGS variant) are going to be attended to for inspection and
replacement of a faulty filter. On 27 May 2016, Maruti Suzuki announced that it had begun exports
of its Light Commercial Vehicle Super Carry to African nation and Tanzania. At that point, the
corporate said that it also plans to export the vehicle to SAARC nations in due course. On 6 July
2016, Maruti Suzuki announced that its popular premium mid-size sedan Ciaz has crossed one lakh
cumulative sales mark within the domestic market. The car was launched in October 2014. On 28
July 2016, Maruti Suzuki announced that its premium retail showroom under the NEXA brand has
completed one year of operations. At that point, the corporate said that NEXA is predicted to
contribute 15% of its sales by 2020. Maruti Suzuki announced an increase in prices of select models
starting from Rs 1,500 to Rs 5,000 (Ex-showroom Delhi) with effect from 1 August 2016. It also
announced an increase in price by up to Rs 20,000 for Vitara Brezza and up to Rs 10,000 for Baleno.
the corporate attributed the value hike to factors like segment-wise demand, interchange movements
and strategic objectives of the corporate. On 12 August 2016, Maruti Suzuki announced that the
cumulative enrollment at its various driving training facilities has touched a record 3 million since
it started driving training within the year 2000.
On 30 August 2016, Maruti Suzuki announced the launch of an edition of its most well-liked
hatchback Swift as Swift Deca. On 1 September 2016, Maruti Suzuki announced the launch of its
sunrise commercial vehicle (LCV), Super Carry, within the domestic market. the corporate has
invested about Rs 300 crore towards the event of the Super Carry. On 15 September 2016, Maruti
Suzuki announced that it's signed a Memorandum of Understanding (MoU) with Uber India to
coach over 30,000 individuals/Uber partner-drivers in safe driving over a period of three years. On
23 September 2016, Maruti Suzuki announced that its attained cumulative exports of 15 lakh
vehicles. These vehicles are exported to over 100 countries including Europe, geographical area
and Africa. On 15 November 2016, Maruti Suzuki declared that it'll track down a first-of-its-sort
Industrial Training Institute in Mehsana, Gujarat. On 25 November 2016, Maruti Suzuki announced
the launch of an edition of its small car Wagon R as Wagon R Felicity with an array of the latest
features. On 9 December 2016, Maruti Suzuki India signed a Memorandum of Understanding
(MoU) with Ola, the web cab aggregator, to coach aspiring Ola 23 driver-partners. the corporate
said that its partnership with Ola will create entrepreneurship opportunities for aspiring Ola drivers-
partners. On 13 January 2017, Maruti Suzuki India reported the dispatch of IGNIS, its exceptional
metropolitan minimized vehicle for the twenty to thirty-year-olds. the corporate, alongside its
providers, has contributed over Rs 950 crore towards the occasion of IGNIS. IGNIS has a 98.5%

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limitation. On 27 January 2017, Maruti Suzuki announced the launch of a replacement VXi+ variant
of its small car WagonR with a large array of recent features including Projector headlamps, stylish
front grille, alloy wheels and side skirts, Dual Airbags, Anti-Lock braking System with Electronic
brake - force distribution system, as optional. Maruti Suzuki announced a price hike starting from
Rs 1,500 to Rs 8,014 (Ex-showroom Delhi) across models with effect from 27 January 2017 thanks
to increases in commodity, transportation and administrative costs. On 30 January 2017, Maruti
Suzuki inaugurated its 200th premium retail showroom NEXA within the country at Hyderabad.
At that point, the corporate said that NEXA is now present in 121 urban communities and had
effectively sold over 1.85 lakh vehicles since its beginning. On 15 February 2017, Maruti Suzuki
announced the launch of an edition of its compact multi-purpose vehicle Ertiga. On 20 February
2017, Maruti Suzuki has announced that its two Smart Hybrid vehicles viz. Ciaz SHVS and Ertiga
SHVS have crossed total sales of 1 lakh units. Smart Hybrid Vehicle by Suzuki (SHVS) could also
be a technology that uses an integrated starter generator and a sophisticated high-capacity battery
to supplement the engine's power. SHVS technology makes it more efficient than the quality set-
up and saves energy while decelerating/braking. On 2 March 2017, Maruti Suzuki announced that
its popular urban sports utility vehicle Vitara Brezza crossed one lakh cumulative sales milestone
within the domestic market. On 27 March 2017, Maruti Suzuki announced that its popular urban
sports utility vehicle Vitara Brezza has clocked sales of over 1.1 lakh units within the primary year
of its launch. On 31 March 2017, Maruti Suzuki announced that its popular midsize sedan Ciaz are
getting to be sold exclusively through its premium stores NEXA from 1 April 2017. On 16 May
2017, Maruti Suzuki launched of an updated version of its sedan Dzire. On 25 May 2017, Maruti
Suzuki declared that it's chosen to arrange car ability improvement focuses across 15 government-
run Industrial Training Institutes (ITIs) across 11 states over a time of a quarter of a year. On 1 July
2017, Maruti Suzuki announced that it's passed on the entire advantage of the products and services
tax (GST) rates on vehicles to its customers and as a result, the ex-display area costs of Maruti
Suzuki models were sliced by up to 3% with impact from 1 July 2017. However, due to the
withdrawal of tax concessions on mild hybrid vehicles, the price of the Smart Hybrid Ciaz Diesel
model and Smart Hybrid Ertiga Diesel has increased. 24 On 7 July 2017, Maruti Suzuki announced
that the National Company Law Tribunal (NCLT) has approved the scheme of amalgamation of
Maruti Suzuki India Limited and seven of its wholly-owned subsidiary companies viz. Maruti
Insurance Business Agency Limited, Maruti Insurance Distribution Services Limited, Maruti
Insurance Agency Network Limited, Maruti Insurance Agency Solutions Limited, Maruti Insurance
Agency Services Limited, Maruti Insurance Agency Logistics Limited and Maruti protection
intermediary Limited. On 3 August 2017, Maruti Suzuki reported the presentation of auto stuff

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move choice in the top-end Alpha variation of its top-notch metropolitan smaller vehicle IGNIS.
On 10 August 2017, Maruti Suzuki declare a whole revamp of its True Value operations, designed
to make pre-owned cars more attractive and transparent to customers. On 30 August 2017, Maruti
Suzuki declare the transformation of its retail network across India. The new showrooms christened
Maruti Suzuki ARENA, will sport modern looks and offer a warm, friendly and comfy environment
to the patrons. On 29 September 2017, Maruti Suzuki announced the launch of parent Suzuki Motor
Corporation's global ECSTAR brand of lubricants, coolants, and care products in India. On 1
October 2017, Maruti Suzuki announced the launch of the latest version of its premium urban
offering S-Cross.
Maruti further said at that time that it's sold over 53,000 units of S-Cross within the domestic market
and exported over 4,600 units since its launch in August 2015. On 5 October 2017, Maruti Suzuki
announced the launch of a refreshed version of its compact Celerio. Maruti further said at that time
that Celerio has achieved the three-lakh sales mark within a quick span of but four years. On 1
December 2017, Maruti Suzuki announced the launch of the bold, sporty and classy CelerioX
machine. The model is an extension of Maruti's Celerio car.
On 27 December 2017, Maruti Suzuki announced that it's entered into an agreement with the govt.
of NCT of Delhi to line up state-of-the-art Automated Driving Test Centres across 12 locations
within the town. the company will invest approximately Rs 15 crore for fixing the driving test
centers. While Maruti Suzuki will found the centres and maintain them for 3 years, the Transport
Department will conduct the tests and issue driving licenses to eligible applicants. Maruti Suzuki
declares an increase ranging from Rs 1,700 to Rs 17,000 (Ex-Showroom - Delhi) across models
with effect from 10 January 2018, due to an increase in commodity and other administrative and
distribution costs. At the time of approval of Q3 December 2017 results on 25 January 2018, the
Board of Directors of Maruti Suzuki discussed and approved a revision within the tactic of
calculating royalty payment to Japanese parent Suzuki Motor Corporation which will end in lower
royalty payments for Maruti Suzuki for brand fresh model agreements starting the Ignis. this is
often ready to be implemented after approval by the Board of Suzuki Motor Corporation. 25 On 7
February 2018, Maruti Suzuki showcased the new automobile Concept Futures at Delhi Auto Expo
2018 in New Delhi. On 8 February 2018, Maruti Suzuki declare the launch of an upgraded version
of its premium hatchback Swift at Auto Expo 2018 in New Delhi.

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IT SERVICE/CONSULTANCY SECTOR

1) Infosys Limited Infosys Ltd

It could be a global technology services firm that defines, designs and delivers information
technology (IT)-enabled business solutions to its clients. the corporate provides end-to-end business
solutions that leverage technology for his or her clients, including technical consulting, design,
development, product engineering, maintenance, systems integration, package-enabled consulting,
and implementation and infrastructure management services. the corporate also provides software
products to the industry. they need to develop Finacle, a universal banking solution to large and
medium-size banks across India and overseas. Infosys BPO may be a majority-owned subsidiary.
Through Infosys BPO, the corporate provides business process management services, like offsite
customer relationship management, finance and accounting, and administration and sales order
processing. the corporate has a marketing and technical alliance with FileNet, IBM, Intel,
Microsoft, Oracle and System Application Products. Infosys Ltd could be a public limited and
India's second-largest software exporter company was incorporated within the year 1981 as Infosys
Consultants Pvt Ltd by Mr. N.R. Narayana Murthy at Karnataka. the corporate was started by seven
people with an investment of USD 250. the corporate became a public Ltd. within the year 1992.
the corporate was the primary Indian company to be listed on the NASDAQ within the year 1999.
Infosys also forms an element of the NASDAQ-100 index. Continuously within the year 2001, 2002
and 2003, the corporate wins the National award for excellence in corporate governance conferred
by the govt of India. In April 2002, Infosys BPO Ltd was incorporated in India to deal with
opportunities in business process management. within the year 2004, the corporate acquired 100%
equity in Expert Information Services Pty Ltd, Australia for USD 24.3 million.

The acquired company was renamed Infosys Technologies (Australia) Pty Ltd. On October 2, 2004,
they founded a completely owned subsidiary in the People's Republic of China named Infosys
Technologies (China) Co Ltd. within the year 2005, the corporate established Infosys Consulting
Inc, a completely owned subsidiary in Texas, the US to feature high-end consulting capabilities to
their Global Delivery Model. the corporate was selected as 'Best Outsourcing Partner' by the readers
of Waters, a publication covering the requirements of chief information officers within the capital
market firms. within the year 2007, the corporate increased the stake value in Progeon to 98.9%
after acquiring shares from Citicorp International 26 Financial Company. Infosys had condemned
Philips' finance and administration business process outsourcing (BPO) centres spread across India,
Poland and Thailand for USD 28 million. Infosys founded various Special Economic Zone that for
the corporate has a further deduction.

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They founded another Special Economic Zone unit in Chandigarh which can be eligible for 100%
deduction of cash in on exports tax calculation for the primary five years followed by 50%
deduction for the next five years. Infosys has been seeking after its development plans in the course
of recent years. the longer-term enhancement of the corporate is to emerge the developing
economies changing the business landscape with help of accessible talent pools and therefore the
adoption of the non-linear growth model. it's an extended-term strategy. Infosys Technologies Ltd
has partnered with ACDI/VOCA for promotes broad-based economic process and to develop
information and communication technology-enabled application to boost efficiencies within the
agro supply chain in India. within the year 2008, the corporate established its first resident
subsidiary, namely Infosys Technologies S de R L de C V in Mexico to boost proximity to their
North American clients. They also opened a development centre and office for the region in
Monterrey, Mexico. As of April 2008, the corporate acquired Internet Protocol (IP) from an
Australian company to feature more functionality to Finacle. The IP, that gives a comprehensive
set of economic tools to the company's existing product.

In July 2008, the corporate launched ShoppingTrip360 to assist retailers and consumer foodstuff
(CPG) companies achieve visibility into in-store activity. ShoppingTrip360 may be a platform that
allows a collection of managed-information services to form a 360-degree view of real-time future
shopper and shelf activity. the corporate was ranked among the highest 50 most respected
companies within the world by Reputation Institute's Global Reputation Pulse 2009. they need been
voted the 'Most Admired Indian Company' within the Wall Street Journal Asia 200 for 10 years in
an exceeding row since 2000. the corporate was also listed within the Most Admired Knowledge
Enterprises (MAKE) 2008 study and Forbes' Asian Fabulous 50 for the fourth consecutive year. On
29 December 2017, Infosys announced that it's signed an agreement for divestment of its entire
investment in ANSR Consulting Holdings, Inc., a Delaware corporation, for a complete
consideration of USD 1,000,000. On 5 January 2018, Infosys announced that it had won a contract
from Proximus, the most important telecommunications company in Belgium, to implement Excite
- a business transformation program geared toward delivering superior digital customer experiences
for its enterprise clients. The multi-year program will strengthen Proximus' leadership within the
professional services market by replacing legacy IT systems, streamlining processes and deploying
advanced tools for quoting, selling, ordering, billing, invoicing and more. On 9 January 2018,
Infosys declared the successful conclusion of an Advance Pricing Agreement (APA) with the U.S.
taxation Service (IRS). Under the APA, Infosys and therefore the IRS have agreed 27 on the
methodology to allocate revenues and compute the taxable income of the company's US operations.

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2) TCS
Its Indian multinational information technology (IT) services and consulting firm, headquartered
in Mumbai, Maharashtra, India. As of February 2021 TCS, is that the largest company within the
IT sector within the world by the market capitalisation of $169.2 billion. it's a subsidiary of the
Tata Group and operates in 149 locations across 46 countries. TCS is that the second-largest
Indian company by market capitalisation. Tata consultancy services is now placed among the
foremost valuable IT services brands worldwide. In 2015, TCS was ranked 64th overall within the
Forbes World's Most Innovative Companies ranking, making it both the highest-ranked IT
services company and therefore the top Indian company.

As of 2018, it's ranked eleventh on the Fortune India 500 list. In April 2018, TCS became the
primary Indian IT company to succeed in $100 billion in market capitalisation and therefore the
second Indian company ever (after Reliance Industries achieved it in 2007 after its market
capitalisation stood at ₹6,79,332.81 crore ($102.6 billion) on the Bombay stock market. In 2016–
2017, Parent company Tata Sons owned 72.05% of TCS; and quite 70% of Tata Sons' dividends
were generated by TCS. In March 2018, Tata Sons decided to sell stocks of TCS worth $1.25
billion during a bulk deal. Tata Consultancy Services Limited initially started as "Tata Computer
Systems" was founded in 1968 by the division of Tata Sons Limited. Its early contracts included
punch card services to sister company TISCO (now Tata Steel), performing on an Inter-Branch
Reconciliation System for the financial institution of India, and providing bureau services to unit
investment trust of India. In 1975, TCS delivered an electronic depository and trading system
called SECOM for Swiss company SIS SegaInterSettle it also developed System X for the
Canadian Depository System and automatic the Johannesburg stock market.

TCS related to a Swiss partner, TKS Teknosoft, which it later acquired. In 1980, TCS established
India's first dedicated software research and development centre, the Tata Research Development
and style Centre (TRDDC) in Pune. In 1981, it established India's first client-dedicated offshore
development centre, found out for clients Tandem. In (1993) TCS partnered with Canada-based
software factory Integrity Software Corp, which TCS later acquired. In anticipation of the Y2K
bug and therefore the launch of a unified European currency (Euro), Tata Consultancy Services
created the factory model for Y2K conversion and developed software tools that automated the
conversion process and enabled third-party developer and client implementation. Towards the top
of 1999, TCS decided to supply a choice network (DSS) within the domestic market under its
Corporate vice-chairman and Transformation Head Subbu Iyer. On 25 August 2004, TCS become
a listed company. In 2005, TCS became first India based IT services company to enter the

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bioinformatics market. In 2006, it designed an ERP system for the IRCTC. By 2008, its e-
business activities were generating over US$500 million in annual revenues.

TCS entered the tiny and medium enterprises marketplace for the primary time in 2011, with
cloud-based offerings. On the last trading day of 2011, it overtook RIL to realize the very best
market capitalisation of any India-based company. within the 2011/12 financial year, TCS
achieved annual revenues of over US$10 billion for the primary time. In May 2013, TCS was
awarded a six-year contract worth over ₹1100 crore to supply services to the Indian Department
of Posts.] In 2013, the firm moved from the 13th position to the 10th position within the League
of top 10 global IT services companies and in July 2014, it became the primary Indian company
with over ₹5 lakh crore market capitalisation. In the month of Jan 2015, TCS terminate RIL's 23-
year run as India's most profitable firm. In Jan 2017, the corporate announced a partnership with
Aurus, Inc., a payments technology company, to deliver payment solutions for retailers using TCS
OmniStore, a primary of its kind unified store commerce platform. within the same year, TCS
China was associated as a venture with the Chinese government. TCS announced its FY19 Q3
results posting a 24 per cent year-on-year (YoY) rise in profit at ₹8,105 crores. The stock plunged
2.5 per cent intra-day as brokerages discount target. On 8 October 2020, TCS surpassed
Accenture in market capitalisation to become the world's most precious IT company with a
market cap of $144.73 billion. On 25 January 2021, TCS again surpassed Accenture briefly, in
market capitalisation to become the world's most precious IT company with a market cap of $170
billion. an equivalent day, TCS became India's most precious company, surpassing Reliance
Industries with a market cap of ₹ 12.55 lakh crore

FMCG SECTOR

1) ITC Ltd

ITC Ltd (ITC) was incorporated on August 24, 1910, under the name Imperial Tobacco Company
of India Ltd. to make cigarettes and tobacco. In 1975, the company entered the hospitality business
with the acquisition of ITC–Welcomegroup Hotel Chola. the name of the Company was changed
to I.T.C. Limited in 1974. In recognition of the Company's multi–business portfolio encompassing
a wide range of businesses – Cigarettes & Tobacco, Hotels, Information Technology, Packaging,
Paperboards & Specialty Papers, Agri–Exports, Foods, Lifestyle Retailing and Greeting Gifting &
Stationery – the full stops in the Company's name were removed effective September 18, 2001. The
Company now stands rechristened 'ITC Limited'. ITC is one of India's foremost private sector
companies with a market capitalisation of nearly US $ 14 billion and a turnover of over $ 5 billion.

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ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most
Reputable Companies by Forbes magazine, among India's Most Respected Companies by
BusinessWorld and among India's Most Valuable Companies by Business Today. ITC ranks among
India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and
published by the Economic Times. ITC also ranks among Asia's 50 best performing companies
compiled by Business Week. In 1975 the Company launched its Hotels business with the acquisition
of a hotel in Chennai which was rechristened 'ITC–Welcomgroup Hotel Chola'.
The objective of ITC's entry into the hotels business was rooted in the concept of creating value for
the nation. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam
Paperboards Limited, which today has become the market leader in India. Bhadrachalam
Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of
the Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with
the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division.
ITC's paperboards' technology, productivity, quality and manufacturing processes are comparable
to the best in the world.
In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch
of Expressions range of greeting cards. A line of premium range of notebooks under brand
“Paperkraft” was launched in 2002. To augment its offering and to reach a wider student population,
the popular range of notebooks was launched under brand “Classmate” in 2003. “Classmate” over
the years has grown to become India’s largest notebook brand and has also increased its portfolio
to occupy a greater share of the school bag. Years 2007– 2009 saw the launch of Children Books,
Slam Books, Geometry Boxes, Pens and Pencils under the “Classmate” brand. In 2008, ITC
repositioned the business as the Education and Stationery Products Business and launched India's
first environment friendly premium business paper under the “Paperkraft” Brand. “Paperkraft”
offers a diverse portfolio in the premium executive stationery and office consumables segment.
Paperkraft entered new categories in the office consumable segment with the launch of Textliners,
Permanent Ink Markers and White Board Markers in 2009.
ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality
relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later
expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear
(2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players,
in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event –
Wills Lifestyle India Fashion Week – that has gained recognition from buyers and retailers as the
single largest B–2–B platform for the Fashion Design industry. To mark the occasion, ITC launched

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a special 'Celebration Series', taking the event forward to consumers. In 2007, the Company
introduced 'Miss Players'– a fashion brand in the popular segment for the young woman. In 2000,
ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech
India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC Infotech
is one of India’s fastest growing global IT and IT–enabled services companies and has established
itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to
leading global customers across key focus verticals – Manufacturing, BFSI (Banking, Financial
Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality
and Transportation) and Media & Entertainment. During 2018-19, ITC launched over 50 new
FMCG products, across categories such as Foods, Personal Care, Education and Stationery
products, Agarbatti and Matches, strengthening its diverse and differentiated portfolio of FMCG
offerings. On 10 July, 2018, ITC Global Holdings Pte, Limited, Singapore (Global'), a subsidiary
of the company which had been under winding up, was dissolved vide the Order of the High Court
of the Republic of Singapore. Consequently, Global ceased to be a subsidiary of ITC Ltd.
ITC's leading hygiene brand Savlon, became the first Indian brand to win the Grand Prix for
Creative Effectiveness' at the coveted Cannes Lions 2018, ITC received the Diamond Award for
Excellence in Public Relations (ITC Aashirvaad) and Gold Award in the consumer products
category' (ITC Classmate) at the SABRE Awards South Asia 2018. The company adjudged as the
Best In-house Legal Team of the Year Award from Legal Era Magazine the Indian Legal Awards
2018-19. ITC's Paperboards Business was recognised as the Best Performer in the pulp & paper
sector by the Bureau of Energy Efficiency under the Perform, Achieve and Trade Scheme. The
company bagged the First prize in 6 categories at the Public Relation Society of India (PRSI)
National Awards 2018.During the FY2020, despite the COVID lockdown, ITC launched a
bouquet of specially crafted innovative products with agility and speed to cater to the consumers'
urgent needs for health, wellness and hygiene solutions. In the FY2020, the company has
launched more than 60 new products.
ITC won the Best Corporate Initiative in Sanitation Award at the India Sanitation Coalition -
FICCI Sanitation Awards 2019. The company won the First Prize in S categories at the Public
Relations Society of India (PRSI) National Awards 2019. ITC Haridwar Unit won the
Outstanding Performance in food Safety Excellence Award in the Large Manufacturing Food
Business Bakery category at the CII Award for Food Safety 2019. ITC received the CII National
HR Excellence Award for Significant Achievement in HR Excellence. ITC Kovai Unit received
the Platinum level certification, the highest recognition for water stewardship in the world based
on international benchmarks, from the Alliance for Water Stewardship, Scotland. The

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amalgamation of Sunrise Foods Private Limited and its subsidiaries with the Company was
approved by the Board of Directors on 04 September 2020. The necessary petitions seeking
sanction of the National Company Law Tribunal to the said amalgamation have been filed. As on
31 December 2020, the company has 26 subsidiaries, 4 joint venture and 7 associate companies
under its roof.

2) Hindustan Unilever Limited (HUL)

Hindustan Unilever Limited is an Indian commodity company headquartered in Mumbai, India.
it's a subsidiary of Unilever, a British company. Its products include foods, beverages, cleaning
agents, care products, water purifiers and other fast-moving commodity. HUL was established in
1931 as Hindustan Vanaspati Manufacturing Co. and following a merger of constituent groups in
1956, it had been renamed Hindustan Lever Limited. the corporate was renamed in June 2007 as
Hindustan Unilever Limited. As of 2019 Hindustan Unilever's portfolio had 35 product brands in
20 categories. the corporate has 18,000 employees and clocked sales of ₹34,619 crores in
FY2017–18. In December 2018, HUL announced its acquisition of Glaxo Smithkline's India
business for $3.8 billion in an all-equity merger affect a 1:4.39 ratio. However, the mixing of
GSK's 3,800 employees remained uncertain as HUL stated there was no clause for retention of
employees within the deal. In April 2020, HUL completed its merger with GlaxoSmithKline
Consumer Healthcare (GSKCH India) after completing all legal procedures. Hindustan Unilever's
corporate headquarters are located at Andheri, Mumbai. The campus is cover 12.5 acres of land
and houses over 1,600 employees. a number of the facilities available for the workers include a
shop, a food court, an occupational health centre, a gym, a sports & recreation centre and each
day care centre.

The Campus is meant by Mumbai-based architecture firm Kapadia Associates. The campus
received a certification from LEED (Leadership in Energy and Environmental Design) Gold
within the 'New Construction' category, by Indian Green Building Council (IGBC), Hyderabad,
under licence from the us Green Building Council (USGBC) The company's previous
headquarters was located at Backbay Reclamation, Mumbai at the Lever House, where it had been
housed for quite 46 years. HULS new personal products factory in Doom Dooma, Assam was
formally inaugurated 6 September 2017.

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The new factory, which will manufacture products for leading HUL brands, like Fair & Lovely,
Pond's, Vaseline, Sunsilk, Clinic Plus, TRESemm & Dove, commenced commercial production
on 15 March 2017 HUL, along side its partners has invested Rs 1000 crore within the project On
29 September 2017, HUL announced that it had signed an agreement for divestment of its entire
50% shareholding in Kimberly-Clark Lever Private Limited (KCL) in favour of its venture
partner Kimberly-Clark Corporation (KCC), USA. KCL sells infant care diapers as its primary
product category under the brand Huggies. It also sells feminine care products under the brand
Kotex. During the year 2017, the corporate sold the movable assets and inventory of the leather
business to Hindustan Foods Limited and thereby discontinued the business operations. During
the fiscal 2018, the corporate spent towards cost amounting to Rs 853 crore (Rs 1,372 crore
within the previous year). HUL's local jewel, Hamam bagged a Silver at Effie 2018 for the
#GoSafeOutside campaign. HUL's Brooke Bond Red Label bagged a Silver at Effies 2018 for the
brand's journey of SwadApnepanka. HUL's beverage factory in Kolkata received the
distinguished CIl National Food Safety Award 2017 for outstanding achievements in food safety.
HUL emerged because the Aon Best Employer of 2018. HUL won a gift for excellence in Energy
Conservation and Management from Maharashtra Energy Development Agency (MEDA),
Confederation of Indian Industry, Green Tech During the FY2019, the corporate spent towards
cost amounting to Rs 728 crore (Rs 853 crore within the previous year). During the fiscal 2019,
the corporate entered into an agreement with Vijaykant Dairy and Food Products Limited (CDPL)
and its group companies, acquiring its frozen dessert and frozen desserts business consisting of its
flagship brand Aditya Milk and front-end destruction network across geographies The
Competition Commission of India has vide its order dated 18 February, 2019, accorded its
approval for the amalgamation of GSK CH India with the corporate. the corporate has obtained
No Objection Letters dated 15 February, 2019 from BSE Limited and National stock market of
India Limited for the proposed Scheme of Amalgamation. the corporate had filed the Scheme
with the National Company Law Tribunal (NCLT) for its sanction and therefore the same is
pending.

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The Mumbai Bench of National Company Law Tribunal vide its order dated 02 May, 2019, has
directed the corporate to convene meeting of Equity Shareholders and Unsecured creditors on 29
June, 2019.HUL was adjudged the foremost Innovative Company in India, in Forbes list of The
World's Most Innovative Companies 2018. During the year 2019, Brooke Bond Red Label won
the Brand Campaign of the Year' at the CNBC-TV18 India baron Awards. HUL was recognised
because the winner within the FMCG sector at the Dun & Bradstreet Corporate Awards 2018. the
corporate won this award for the fifth consecutive year.HUL Rajpura factory was recognised with
a Gold award at the Greentech Environment Awards 2018, within the FMCG sector, for
outstanding achievements in Environment Management. During the FY2020, the corporate spent
towards cost amounting to Rs 765 crores (Rs 728 crores within the previous year). In 2020, the
corporate completed the merger of GSK CH on 01 April 2020. The merger is in line with the
Company's strategy to create a sustainable Refreshment (F&R) business in India by leveraging the
megatrend of health and wellness. GSK CH is that the undisputed leader within the food Drinks
category, with iconic brands like Horlicks and Boost, and a product portfolio supported by strong
nutritional claims. In accordance with the Scheme, the corporate has issued and allotted
18,46,23,812 Equity Shares of Re 1/- each to the eligible shareholders of the now amalgamated
GSK CH who were holding shares of GSK CH B on the Record Date i.e. 17 April 2020 within the
ratio of 4.39 shares of the corporate and profitable Foods and for each one share held in GSK CH.

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1.5) SWOT Analysis

SWOT ANALYSIS OF NON-BANKING SECTOR

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 INDIAN IT SECTOR:

Strengths
• Highly skilled, English speaking manpower.
• Cheap workforce than their Western counterparts.as per NASSCOM, the wages difference is as
high as 70-80 percent in comparison to other Western counterparts.
• Lower attrition rates than on the West.
• Dedicated workforce aiming at making an extended term career within the area.
• Round-the clock benefit for Western companies because of the massive time difference
• Lower time interval with efficient and effective service

Weakness
•Recent months have seen an increase within the level of attrition rates among IT workers who are
quitting their jobs to pursue higher studies. lately workers have shown an inclination to not pursue
IT as a full-time career
•. The cost of telecom and network infrastructure is far higher in India than within the US
Opportunities
• To capitalize and encash on the already established image of India being portrayed because
most favored IT destination with the world. Opportunities for Indian companies to figure closely
with western Governments and assure their concerns and issues
Threats
• The anti-outsourcing legislation within the US state of recent Jersey.
• Three more states within the US are planning legislation against outsourcing.
Workers in British Telecom have protested against outsourcing of labor to Indian BPO companies.
Other IT destinations like China, Philippines and Republic of South Africa could have a footing on
the value factor.

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1.6) Problem on Hand
Stability of dividends has some of the following dangers which are as follows once the stable
dividend policy is adopted, it cannot be changed without very seriously affecting the investors’
attitude and the financial position of the company. A deduction in dividend is considered as a
cut in the Salary. Because of the serious depressing effect on the investors due to a deduction in
dividend cut, the company directors have to maintain a stability of dividends during the lean
years even though financial constraints which would indicate elimination of dividends or a cut
in it Consequently, to be on the safe side, the dividend rate need to be fixed at a conservative
figure so that it may be possible to maintain it even in a lean period of several years. To give the
benefit the company’s prosperity, extra dividend can be declared, when a company fails to pay
extra dividend1.

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 1.7 Historical perspective

(Source- Money control)

1.8 Scope of the study

Scope of study Conceptual scope:
To do a relative analysis between NSE index i.e., Nifty Fifty and share prices of selected
companies.

• Limited to Top 10 companies consistent with sector wise market capitalisation and which have
declared dividend within the last decade.

• Limited to NSE Nifty Fifty companies only

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 Chapter: - 2
LITERATURE REVIEW

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2.1 Collection of relevant literature and quote the source of each
material
Dividend policy has been one of financial economists' controversial subjects over the years, while
several studies have been undertaken to solve the dividend puzzle, it remains unresolved. A large
amount of literature is increasing every day due to the broad scope of discussion on dividend policy.
This chapter aims to discuss past corporate dividend policy literature and theoretical models
Lintner (1956) Analyses on how businesses set dividends and concluded that there are four major
issues for companies. Next, there are long-run target dividend pay-out rates for companies. In the
case of traditional firms with steady profits, the pay-out ratio is high and poor for growth companies.
Secondly, the change in dividends follows a shift in predictable long-term profits. Managers are
more concerned about shifts in dividends than with actual ratios. Lastly, administrators do not plan
to undo the dividend adjustment. He finds that businesses pay investors predictable and daily
dividends; while private sector profits may be irrational. This suggests that shareholders prefer
smooth dividend profits. Lintner (1956) In his interview with managers of 28 chosen firms, he
performed a noteworthy analysis on dividend payments, his was the first scientific study on
dividend policy, he claimed that most companies have straight cut target pay-out ratios and that
managers are concerned with improvements in the current dividend pay-out rather than the amount
of the newly defined pay-out. He also notes that, first, dividend policy is set and then other policies
are changed and the market responds favorably to dividend increase announcements and dividend
decrease announcements. As the primary determinant of the payout decisions of the firms, he
assessed big shifts in earnings.

Merton Miller and Franco Modigliani (1961) He indicated that a company's value is not
influenced by its dividend strategy. Dividend plans are a way to split taxpayers' operating cash
flows or simply a financial judgment. This hypothesis of irrelevance was endorsed by financial
economists Martin, Petty, Keown, and Scott in 1991. The assertion of Miller and Modigliani on the
irrelevance of dividend policy posed a challenging challenge to the traditional wisdom of time up
to that period, it was widely understood by both theorists and corporate managers that by having a
more generous dividend policy, the organization would increase its business worth as investors tend
to favor dividends over capital gains (JM Samuels, FM. Wilkes and R.E Brayshaw).

Glen, Karmokolias, Miller, & Shah, 1995, From the point of view of the investor, the return on
their investment is divided into two parts: capital gains and dividends. In part, when it agrees on a
corporate dividend scheme, corporate management determines the essence of the break. In

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developing countries, both investors and management have taken the option between paying
dividends and maintaining earnings very seriously, Economists and has been the point of interest
of tremendous look at. As a consequence, for the main evolved countries, a fairly comprehensive,
if incomplete, photograph of the dividend coverage is available. The dividend debate in rising
markets is mentioned in this article. It indicates that during the one's markets, the dividend technique
is likewise particularly distinct from the expectancies followed in evolved countries. One main
distinction is that rising marketplace companies location greater emphasis on dividend pay-out
ratios than they do on the extent of dividends paid. As a result, dividend bills tend to be greater
unstable in rising markets than in evolved countries, a thing that traders want to be aware of whilst
investing in those markets. Another factor that emerges is that, as those markets broaden and open
to global capital, dividend coverage will increase in importance, even though it isn't always altered
in character. Managers are greater worried approximately their dividend coverage now than they
have been with inside the past. And this issue is augmented through the function of the authorities
in lots of those countries, which acts as a protector of each minority shareholders and lenders
through enforcing constraints on dividend coverage. In phrases of dividend coverage in rising
markets, one vital function of rising markets must be considered, i.e. the authorities exert
manipulate at the companies’ monetary choices thru a few monetary policies (Glen, Karmokolias,
Miller, & Shah, 1995). Adaoglu (2000) helps this view, primarily based totally on proof from his
look at concerning dividend instability in public indexed companies in Turkey.

Benartzi et al. (1997) An comprehensive study was carried out and concluded that the dividend
model of Lintner remains the finest definition available of the dividend setting method. Baker et al.
(2001) performed a survey of 630 NASDAQ-listed companies and evaluated the responses of 188
CFOs on the relevance of 22 separate variables influencing their dividend policy, They found that
the dividend decisions of managers were consistent with Lintner's (1956) study findings and model.
Their results also indicate that executives pay careful attention to the dividend policy of the
company because the dividend decision will affect the value of the company and, in turn, the assets
of the stockholders, so the management needs serious attention to the dividend policy.

Lease, John, Kalay, Loewenstein, & Sarig, 2000. The dividend strategy applies to the
"distribution over time of cash to shareholders." As dividend decisions influence the amount of
equity held in the business, financial managers are very cautious in selecting the dividend policy.
Dividend pay-outs impact the valuation of the company and, most significantly, shareholder equity.

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Baker, Veit and Powell (2001) Examine the variables that influence the dividend policies of
NASDAQ-traded corporate companies. The research, based on a sample survey (1999) of 188
companies out of a total of 630 companies that paid dividends in each quarter of the 1996 and 1997
calendar years, shows that the following four variables have a major effect on the dividend decision:
past dividend pattern, earnings consistency, And the level of projected current and future earnings.
The analysis also notices statistically important discrepancies in the value of indifferent sectors
such as financial and non-financial companies that managers bind to dividend policy.

E.F Fama and K.R French (2001) investigated the traits of corporations paying dividends and
concluded that the topmost traits that have an effect on the selection to pay dividends are Firm
length, Profitability, and Investment possibilities. They studied dividend charge withinside the
United States and determined that the share of dividend payers declined sharply from 66% in 1978
to 20.8% in 1999 and that simplest approximately a 5th of public corporations paid dividends.
Growth corporations which include Microsoft, Cisco and Sun Microsystems had been determined
to be non-dividend payers. They additionally defined that the opportunity that a corporation might
pay dividends became undoubtedly associated with profitability and length and negatively
associated with boom. Their studies concluded that large corporations are extra worthwhile and are
much more likely to pay dividends, than corporations with extra funding possibilities. The courting
among corporation length and dividend coverage became studied via way of means of Jennifer J.
Gaver and Kenneth M. Gaver (1993). They counseled that “A corporation’s dividend yield is
inversely associated with the quantity of its boom possibilities”. The inference right here is that as
coins glide increases, the coefficient of dividend decreases, indicating that smaller corporations
which have more funding possibilities consequently they have a tendency now no longer to make
dividend charge whilst large corporations have a tendency to have proactive dividends coverage

Khan and Jain, 2005, One of the biggest enigmas of modern finance remains the dividend. An
significant decision area in the field of financial management is corporate dividend strategy, so
there is comprehensive literature devoted to the subject. The distribution of earnings (present or
past) in real estate among the company's shareholders in proportion to their ownership is known as
dividends. Dividend policy applies to the long-term judgement by management about how to
employ cash flows from company operations, i.e. how much to plough back into the company, and
how much to return to shareholders.

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Robinson, 2006, Over the years, four major issues have been discussed in dividend policy
literature, i.e. the manner of deciding dividend pay-out, the relevancy of dividends, inter-country
disparities in company’s dividend distribution and vanishing dividends in emerging markets.

Adaoglu (2000), Amidu and Abor (2006) and Belans et al (2007) It stated that net income shows
a positive and substantial correlation with the pay-out of dividends, thereby implying that more
dividends are paid by companies with positive earnings.

Husam-Aldin Nizar Al-Malkawi 2008, Another decision may be taken as a corporation begins to
produce profits: whether to allocate a portion of the earnings to shareholders or reinvest in the
business Opportunities are far more likely to pay dividends for bigger, more successful, and mature
businesses with little investments in 2008. The financial leverage of the company was observed to
have a negative effect on the chances of paying dividends. A quadratic relationship between the age
of the company and dividend decisions was also indicated in the results. Taken together, the results
provide evidence for the interpretation of the dividend strategy for agency costs to some degree and
are largely consistent with the hypothesis of the picking order. The study showed that much of the
current theoretical dividend policy literature can be extended to an evolving dividend policy.

Gupta, Amitabh; Banga, Charu, August 2010, The dividend decision of a corporation is the
outcome of several factors. These aspects differ across time and industry. The present study re-
examines various variables that have an effect on the dividend decision of a business by using a
two-step multivariate approach. In order to derive prominent factors from different variables, first
factor analysis is carried out on the data and then multiple regression is performed on those factors.
The factor analysis results show that the key factors are leverage, liquidity, profitability, growth
and ownership structure

H. Kent Baker, Sujata Kapoor, Imad Jabbouri (2018), This study aims to appear at
dividend policy from the attitude of institutional investors in India. It focuses on their investors to
attach to the dividend policy of their investee firms, the extent of influence they exercise in shaping
such firms’ dividend policies and their results to changes in dividends. This study shows the report
of institutional investors view various explanations for paying dividends

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2.2 Research gap Identification
Many authors say, dividend policy has an insignificant impact on the market price of the firm but
the dividend policy determined supported the investment opportunities available for the
corporate. this study aims to seek out the impact of identified dividend policy determinants on
the market value of the firm.

2.3 Objective of the study

OBJECTIVES: -
To measure the cumulative impact of ‘corporate dividend policy’ and try to conceive a general
trend based on it.
To analyses the trends in dividend payment pattern
To learn and understand the appropriation of profit after tax (EAT: earnings after tax)
To study about the pay-out ratio and retention ratio of firms under different sectors
To explore the insight of a corporate event named “Dividend Policy” which drags lot of attention
and may result into drastic changes in the market valuation of the firm.

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 Chapter: - 3
RESEARCH METHODOLOGY

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3.1 Research Design
Dividend decision is a crucial financial decision made by firms, managers, and investors. This study
aims to contribute to the company finance literature, by gazing the Dividend puzzle. It also aims in
studying the dividend decision methods used for luring the general public into investing. It
comparatively analyses the dividends of various companies of same sector. It studies the
applicability of ‘theory of relevance’ and ‘theory of irrelevance’ on dividend higher cognitive
process. it's important to check on dividend because it is one amongst the company action which is
taken mostly each year, and it'll also help in understanding corporate adjustments. And to be told
about cash dividend, dividend, property dividend, scrip dividend & liquidating dividend.

3.2 Data Source

For the research topic the data source mainly based on secondary data which are collected with the
help of, Internet sources various Business Journal and through various scholars.

3.3 Sample size

For the analysis dividend policy and dividend, I have taken 5 sector and each sector 2 company.
Following are the sectors and the companies
SECTOR COMPANY
BANKING FINANCIAL ICICI BANK AXIS BANK
SERVICE
NON-FINANCIAL BANKING HDFC LTD INDIABULLS
SECTOR
AUTOMOTIVE M&M MARUTI SUZUKI
IT SERVICE/CONSULTANCY INFOSYS TCS
FMCG ITC Ltd Hindustan Unilever
Limited (HUL)

3.4 Research Technique

1. Ratio Analysis

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 Chapter 4 :
Data Collection Analysis & Interpretation

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4.1 Type of data required

Secondary Data
For this data has been collected from the share broking sites and selected banks financial
reports. The data have been collected of selected banks that are included in NSE, BSE

4.2 Sources of Data

Dividend can be paid out of following sources: Out of current year’s profit. Out of past year’s
profit lying in profit & loss account. I Out of past year profit earned and transferred to
reserves. Out of money provided by central government or state government for payment of
dividend.
DECLARATION OF DIVIDEND OUT OF PROFITS

In a year in which the profits are inadequate or there are no profits, the company may declare
and pay dividend out of past year profit earned and transferred to reserves subject to the
provision of the Companies (Declaration and Payment of dividend) Rules, 2014.Notes:
1. For the purpose of declaration of dividend out of reserves, Company shall have to fulfils
following Conditions:
(i) The rate of dividend shall not exceed the average of 3 years immediately preceding
that year.
(ii) The total amount to be drawn from such accumulated profit shall not exceed
1/10th of the sum of its paid-up share capital and free reserves as appearing in the
latest audited financial statement.
(iii) The amount so withdrawn shall first be utilized to set off the losses incurred in
the financial year in which dividend is declared before any dividend in respect of
equity shares is declared.
(iv) The amount so withdrawn shall first be utilized to set off the losses incurred in the
financial year in which dividend is declared before any dividend in respect of equity
shares is declared
(v) No company shall declare dividend unless previous losses and depreciation not
provided in previous year or years are set off against profit of the company of the
current year.

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4.3 Descriptive statistics

Ratios of the company

NBFC: -

HDFC India bulls

16- 17- 18- 19- 20- 16- 17- 18- 19- 20-
17 18 19 20 21 17 18 19 20 21
DPS Dividend paid/ 26% 28% 22% 17% 22% 39% 45% 42% 59% 33%
earnings after
tax * 100
EPS Total 64.5 69. 71.48 94.29 123.7 68.57 91.33 95.71 51.45 25.99
earnings/outsta 56 5
nding shares
Retenti EPS- DPS/EPS 95.69 70% 74.82 83.20 80.56 60.70 54.66 58.25 39.98 65.37
on % % % % % % % % %
ratio
Sales growth 13% 23% 17% 6% 27% 21% 22% 12% -29% -32%
Net profit growth 8% 8% 26% 24% -14% 19% 25% 5% -86% -83%

IT:-

INFOSYS TCS

16- 17- 18- 19- 20- 16- 17- 18- 19- 20-
17 18 19 20 21 17 18 19 20 21
DPS Dividend paid/ earnings 41 59 60 45 59 35 37 36 85 43
after tax * 100 % % % % % % % % % %
EPS Total 31. 36. 35. 38. 45. 66. 67. 83. 86. 87.
earnings/outstanding 24 69 26 96 42 71 46 87 19 67
shares
Retention EPS- DPS/EPS 49. 53. 6.3 38. 49. 61. 63. 66. 4.1 64.
ratio 48 57 5 53 25 26 21 45 95
Sales growth 9% 3% 15 9% 10 8% 4% 16 7% 4%
% %
Net profit growth 6% 10 - 7% 14 7.6 - 17. 2.6 0.2
% 4% % 8 1.7 94 8 8
9

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Automotive

MARUTI SUZUKI MAHINDRA & MAHINDRA

1 2 3 4 5 1 2 3 4 5
DPS Dividend paid/ 30% 31% 32% 32% 31% 22% 11% 17% 205% 54%
earnings after tax
* 100
EPS Total 248.6 260.8 253.2 187. 145. 29.7 60.4 42.7 1.02 14.5
earnings/outstan 1 6 1 9 3 7 1 6 8
ding shares
Retenti EPS- DPS/EPS 85.92 71.24 68.4 57.4 58.7 79.0 88.7 82.3 - 85.5
on ratio 2 7 6 793.4 3
9
Sales growth 15% 15% 7% - -8% 9.47 9.04 12.0 -38.92 -
14% 6 1.49
Net profit growth 27% 5% -3% - - 14.8 50.7 - - 92.9
35% 29% 7 6 41.3 4085. 9
04

Consolidation and representation of Result

Non-Banking Financial Services

Dividend Per Share

NBFC

41 40
31
27
21 21 23
18 20

2016-17 2017-18 2018-19 2019-20 2020-21

Hdfc Ltd Indiabull

The DPS of HDFC & Indiabull Housing finance shows an interesting trend in the year 2017,
2018 and 2019 but it drops in the year 2020 for Indiabulls. The DPS falls from ₹ 40 to ₹ 31 inthe
year 2020 and still decreased in 2021 to ₹ 9. The average dividend payout ratio of HDFC Ltd is
₹ 20.6 and Indiabull ₹ 29.6.

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IT-

Dividend Per Share

IT
80
70
73
60
50
40
30 38
20 30 27
23.5 25
21.75 21.5
10 17.5
12.88
0
2016-17 2017-18 2018-19 2019-20 2020-21

Infosys Ltd TCS Ltd

The DPS of Infosys Ltd & TCS Ltd shows an increasing trend in the year 2017, 2018 and
2019 but it drops in the year 2020 for Infosys. The DPS of TCS falls from ₹ 73 to ₹ 38 in the
year 2021. The average dividend payout ratio of Infosys is ₹ 20.12 and TCS ₹ 37.9.

Automotive

Dividend Per Share

Automotive
90
80
70 80
75
60
50 60
40
45
30
20
25
10 6.50 7.5 8.5 2.35 8.75
0
2016-17 2017-18 2018-19 2019-20 2020-21

Maruti Suzuki Ltd Mahindra & Mahindra

The DPS of Maruti Suzuki Ltd & Mahindra & Mahindra shows an increasing trend in the
year 2017, 2018 and 2019 but it drops in the year 2020. The DPS of M&M fall from ₹ 8.5 to
₹ 2.35 in the year 2020 and increased in 2021 to ₹ 8.75. The average dividend payout ratio of
Maruti Suzuki Ltd is ₹ 57 and Mahindra & Mahindra ₹ 6.72.

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 Chapter 5
Summary and Conclusion

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5.1 : - Summary and conclusion
1. Dividend policy is very important in the management of company’s earnings. So, decisions
related to dividend policy have a significant effect on credit standing of the firm, its share
prices and its future growth.
2. The valuation of any company depends on its earnings. Due to decentralization of
ownership and management in company’s organizational structure, it is obvious that should
decide the dividend policy in which the trusts of shareholders are maintained.
3. The study reveals the correlation of different variables such as Liquidity, Leverage, Size
and growth, provision for taxation with dividend payout. Remarkable observations were
found among these variables for different companies in banking industry. Apart from this, the
study also shows how the fluctuations in dividend payout ratio have taken place, year by year
due to variation in different independent variables.

5.2 Recommendations
1. Dividend policy is set largely at the discretion of the management. One of the major
important factor managements has to consider is shareholders’ interest.
2. Since reduction in dividend may create a negative impression in the mind of shareholders
which will affect the credit position of the company so it is suggested to the companies that
dividend raised should not be reduced.
3. Every year declaration of dividends is necessary. As shareholders are the owners of the
company and risk is directly associated with the ownership. As shareholders bear the risk, so
they expect a fair return in form of dividend. So, it is suggested to the companies to provided
fair dividends to the shareholders for better investment options and goodwill of the company.
4. Dividend policy should be decided keeping in mind the growth needs of the firm. A high
dividend payout reduces firm’s access to retained earnings, the cheapest source of capital. For
that reason, management may prefer lower dividend payout ratios, especially in growth firms
as the retained funds would be required for expansion purposes.

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