As many as 92 large companies which sit on a mount of cash, can pay out additional dividends to the tune of Rs 34,000 crore, for the past fiscal year when these firms had muted earnings growth, says a report.
These 92 companies, drawn from the BSE 500 index whose members are sitting on a whopping Rs 1.85 trillion in aggregate cash/cash equivalents, have already paid Rs 40,700 crore in dividends in 2016-17 but can pay Rs 34,000 crore more, says proxy advisory firm IiAS.
According to its analysis, based on corporate financials in 2016-17, these companies continue to maintain large cash balances and at least 92 of them can potentially return cash to its shareholders as dividends or buybacks.
The companies, which are taken from S&P BSE 500 index, includes TCS, Infosys, Wipro, M&M, Ashok Leyland, Bajaj Auto, Indraprastha Gas, GsK Consumer Healthcare, Jubilant FoodWorks, and Nestle India among others.
It can be noted that TCS had concluded a Rs 16,000- crore share buyback in the second quarter, while Wipro did an Rs 11,000-crore buyback and Infosys concluded a Rs 13,000- crore buyback in the third quarter.
"Despite a muted earnings growth in fiscal 2017, these companies can pay higher dividends from their existing cash piles," IiAS said.
"Our research has identified 92 of the S&P BSE 500 companies that hold about Rs 1.85 trillion in cash or cash equivalents, of which conservatively, almost Rs 34,000 crore can be paid out in incremental dividends," it said. These 92 companies have already paid Rs 40,700 crore in dividends in 2016-17 but can pay Rs 34,000 crore more.