U.K. Sinha said. “There are a number of companies that have enough cash. They should formulate a policy to distribute a share of this cash among shareholders,” Sinha said at a conference on corporate governance.
Although Indian regulations do not make it necessary for companies to declare a dividend policy, in emerging economies such as Brazil, regulations require that the bye-laws of a company mention a minimum percentage of dividends from its net income that would be distributed to shareholders every year. In India, companies typically declare dividends for shareholders at the end of financial year in March only if they record profits on expected lines or they accumulate enough cash.
Once the market regulator makes dividend payout policy compulsory, minority shareholders will receive a regular income from performing firms as long as they stay invested. Companies such as Coal India Ltd had Rs 52,389 crore in cash, Reliance Industries had Rs 37,984 crore, Tata Motors Rs 29,711.79 crore, Infosys Rs 25,950 crore and ONGC had Rs 24,480.13 crore, according to annual reports ended 31 March.
