More Firms Put Aside Payout Plans

The number of corporates which have decided against announcing interim dividends is swelling with more leading corporates joining the queue today.

Grasim Industries, Bajaj Auto, HCL Technologies, Dr Reddy's Laboratories, Mirc Electronics, Cipla, Ashok Leyland and Kotak Mahindra, among others, today decided to skip payment of interim dividends to meet the March 31 deadline following the Securities and Exchange Board of India (Sebi) directive to the stock exchanges on Wednesday.

Four listed companies from the Reliance group, including Reliance Industries and Reliance Petroleum, have already informed the stock exchanges of their decision not to announce interim dividends.

More companies have still not yet taken a final decision on their dividend payout. Asian Paints, Aftek Infosys, Mukta Arts, TVS Srichakra, Rane Brake and Jindal Polyester are some of the companies which are holding board meetings tomorrow to consider payment of interim dividend.

Last week, over 500 companies had decided to call board meetings for deciding on interim dividend payouts.

The chairman of a leading corporate said, "It is very, very unfortunate that Sebi found loopholes to prevent corporates from paying interim dividends. Most corporates have had to rescind their dividend plans as no company wanted to stand alone against the Sebi directive."

"Our shareholders are now certain to be very unhappy with us for not sticking to our decision on the interim dividend payout. There simply was not enough time for companies to come together and take a collective stand against the Sebi directive owing to the fast turn of events," he added.

The finance minister had in the Union Budget announced that income from dividends would be taxed at the hands of the recipient after March 31.