Tech promoters top list of cash recipients; family-owned groups earn less

Reliance Industries' Mukesh Ambani is fourth on the list in terms of income earned (dividend) from his company in 2020-21 (FY21)

The country's wealthiest promoter families are not necessarily the biggest earners (cash recipients) from their listed companies. Cash receipts include dividends and money received from shares sold/tendered in buybacks.
 
Reliance Industries’ Mukesh Ambani is fourth on the list in terms of income earned (dividend) from his company in FY21. Similarly, Gautam Adani – the country’s second wealthiest family is ranked 10th in terms of dividend income earned from the group.
 
In contrast, promoters owning tech firms, cash-rich FMCG and pharma companies top the charts in terms of dividend income. For example, Wipro’s Azim Premji has received the highest cash in FY21 for the second consecutive year among individual promoters and second overall. (See the adjoining chart)
 
The dividend income and value of promoter's stake is net of cross-holding in listed group companies. It excludes the dividend declared by listed subsidiaries and associates of the group's main holding and operating companies.
 
Tata Sons continues to top the cash-rich promoters' list in the country in the private sector followed by Azim Premji of Wipro and Anil Agarwal of Vedanta. The Tata group earned nearly Rs 23,700 crore by way of equity dividends and cash from share buyback from its listed companies in FY21. Bulk of Tata Sons' earnings came from Tata Consultancy Services (TCS), which spent around Rs 30,000 crore on dividends and share buyback in FY21.
 
It is followed by Azim Premji of Wipro - India's fourth largest IT services company by revenues. The Premji family earned around Rs 7,337 crore by way of equity dividends and proceeds from share buyback in FY21.
 
Wipro paid a total equity dividend of Rs 548 crore in FY21. Azim Premji's biggest source of income was from the company's share buyback. The IT major spent Rs 9,500 crore on share buyback last fiscal, bulk of which went to promoters who own nearly 73 per cent stake in Wipro.
 
As Tata Sons is largely owned by charitable trusts, Azim Premji becomes the most cash promoter among individuals.
 
Vedanta's Anil Agrawal family is at the third spot in the overall list in terms of dividend income from the group's listed company. The Agrawal family earned nearly Rs 2,400 crore by way of dividend from Vedenta and Sterlite Technologies.
 
The non-ferrous metals-to-oil producer, Vedanta has proposed to pay almost Rs 3,500 crore as equity dividend in FY21, nearly two-third of which will accrue to promoters given their 65 per stake in the company. Interestingly, the group's most valuable company and one of the country's biggest dividend payers - Hindustan Zinc is not directly owned by promoters but is a subsidiary of Vedanta. Hindustan Zinc spent around Rs 9,000 crore on equity dividends nearly two-third of which accrued to Vedanta.
 
The country's wealthiest promoter - Mukesh Ambani family is fourth on the list with dividend income of nearly Rs 2,217 crore in FY21. Ambani's stake in Reliance Industries is however worth Rs 7.21 trillion or around $100 billion, which is far ahead of Wipro's Azim Premji or Anil Agarwal of Vedenta.
 
This is because Reliance Industries (RIL) has a much lower dividend payout ratio than other big listed companies. In FY21, RIL distributed just 7.3 per cent of its net profit on equity dividends, against Wipro's pay-out ratio of 92 per cent and Vedanta's 24 per cent.
 
The analysis is based on the dividend payouts and share buybacks by the country's top 1,000 listed companies that are part of BSE 500, BSE Mid-Cap and BSE Small Cap indices. The analysis excludes public sector companies, listed subsidiaries of multinationals and institutions-owned companies.
 
Other promoters with big cash earnings from their group companies in FY21 include Shiv Nadar (Rs 1,966 crore) of HCL Technologies, Infosys founders (Rs 1,500 crore), Bajaj group, Dilip Shanghvi of Sun Pharma, Asian Paints promoters and Gautam Adani family.