Poor Results Force 65 Firms To Skip Payouts

Sixty five companies have skipped dividends for 2001-02 following a poor performance. This means a double blow for shareholders who have to grapple with a capital erosion in the markets as well.

As per data available with Business Standard Research Bureau, 65 companies on account of a hefty net loss of Rs 307.38 crore for 2001-02. proposed to skip dividends. During 2000-01, with aggregate net profit of Rs 285.79 crore, these companies distributed dividends ranging from 5 per cent to 30 per cent.

Investors in midcap software companies are the worst-hit. As the slowdown in US economy spreads worldwide, as many as seven software companies which reported net loss during 2001-02, skipped the dividend. The few names were, BSEL Information Systems, GDR Software, Melstar Information Technologies, VMC Software, Vintron Information, Zenith computer and Zenith Infotech.

 

A slowdown means less number of tourist arrivals. The sector which will be majorly hit will be hotel. ITC Hotels, Jindal Hotels, Morepen Hotels, Taj GVK Hotels and Tulip Star Hotels preferred to skip dividend as they reported net losses during 2001-02.

SPIC which incurred a net loss of Rs 215.50 crore and Eveready Industries with a net loss of Rs 153.32 crore, including provision of Rs 100 crore, were among the companies which skipped dividends.

Television Eighteen, after deciding 'conserve cash' policy, to reduce the company's debt and expand profit margins, gave divided the skip in FY02. The company had paid 10 per cent in 2000-01.

Saregama India, which paid dividend of Rs 3 a share for FY01, skipped it in 2001-02 as following a net loss of Rs 25.76 crore for FY02.

Pharmacia Healthcare, AVT Natural products, Lahoti overseas and Mukand Engineering paid dividend of 20 per cent each in 2000-01, but skipped it for FY02.

Carrier Aircon, which had paid dividend of Rs 2.20 a share in the last three financial years, skipped dividend for FY02. The company had posted a net loss of Rs 5.25 crore in FY02.