Dividend Distribution Hits ₹5 Lakh Crore as Indian Companies Break Records in FY2025

PS Shekhawat

Published on: 10 June 2025

Dividend distribution by Indian companies has reached an all-time high in FY2025, crossing the ₹5 lakh crore mark. This massive payout highlights a growing trend where businesses are choosing to reward shareholders directly with cash rather than going for share buybacks. The analysis covers 1,218 companies from indices like BSE 500, Midcap, and Small Cap, showing a shift in capital allocation strategies.

While this rise in dividend distribution is great news for investors, it also comes with a noticeable drop in buyback activities—a move that signals changing corporate priorities.

Top Companies Leading Dividend Payouts

Among the 1,218 companies, the top 10 contributed over 38% of the total dividend. Here’s a quick breakdown of the major contributors:

TCS: ₹45,612 crore (YoY growth of 72.6%)
Infosys: ₹17,827.8 crore (down 6.4%)
HDFC Bank: ₹16,824.8 crore (13.6% increase)
Hindustan Zinc: ₹16,331.2 crore (up 5.4%)
Coal India: ₹17,957.7 crore (4.6% growth)

Public sector companies like ONGC and Power Grid also played a major role in boosting dividend distribution numbers.

The Decline in Share Buybacks

Despite strong profits and stable cash flow, many companies are stepping back from share buybacks. Data shows a 28% decline in buyback volume compared to previous years. Instead of repurchasing their shares, firms are opting to maintain liquidity and reward shareholders through consistent dividend distribution.

Interestingly, most of the buyback activity came from just 5 companies, showing a clear reduction in its popularity.

What’s Behind the Shift?

Experts believe this trend is due to multiple factors:

Companies are focused on long-term stability rather than short-term stock price gains.
High stock valuations make buybacks less attractive.
There’s a growing need to conserve cash reserves due to global economic uncertainty.

Sectors like IT and banking, with strong earnings and minimal debt, are at the forefront of this dividend distribution surge.

Final Thoughts

The record-breaking ₹5 lakh crore dividend distribution in FY2025 showcases the confidence of Indian companies in their financial health. While the decline in buybacks may raise eyebrows, it reflects a maturing approach toward shareholder value creation.

As we move forward, investors can expect more consistent dividends but fewer surprises in the form of share repurchases.