An analysis of dividend payout trends of select Indian Information Technology Companies

The subject matter of dividend policy has been an issue of interest in financial literature since the birth of the modern commercial corporations. Although, several academicians and researchers have attempted to solve this apparent issue and devise theories and models. Regardless of many studies conducted by financial economists, the issue of dividend policy still remains debatable issue. In this regard, an attempt has been made to explore the dividend policy adopted by the selected Indian IT companies. Further, the study examines the dividend payout trends of selected Indian IT companies. For this purpose, the dividend payout ratio (DPR) has been taken into account as the indicator of dividend policy. A sample of five IT companies listed at National Stock Exchange (NSE) have been selected by using convenience sampling with the indication of having continue profits, consequent to declare dividend regularly and availability of financial information during the study period i.e., 2008–09 to 2017–18. The empirical evidence from this study reveals that Infosys have adopted a liberal dividend payout policy and also have a good consistency in dividend payouts as compared to other companies of the Industry under study. Conversely, the Tech Mahindra has followed a more conservative dividend policy and also has highest degree of inconsistency in dividend payouts among the companies under study. Also, the study revealed that the Indian IT companies have followed irregular dividend payout pattern over the period under study.