Ownership structure’s effect on dividend policy: A study of selected Indian Private sector bank

Dividend distribution decisions are crucial elements of business policy and have been identified as a topic of interest in financial literature. The dividend, which serves as remuneration for stockholders’ assumption of risk and investment, relies on various factors. The aim of this research is to assess how ownership structure influences the proportion of dividends distributed by a firm. The ownership structure is a crucial determinant of a firm’s overall well-being. The current investigation was of a causal nature. The study will analyze the link in the Indian setting, using a sample of 10 private sector banks. Data will be gathered for the preceding 11 years, spanning from 2010 to 2021. The topic of sampling will be discussed. The factors to consider include the dividend pay-out ratio, the promoter’s ownership, the holding of foreign institutional investors (FIIs), the holding of domestic institutional investors (DIIs), and the shareholding by the general public. Stationary test, actual fitted residual analysis, heteroskedasticity test, and histogram normality test were conducted. The study employs multiple regression analysis on the sampled companies to examine the hypothesis. The results indicate that the ownership pattern has a substantial influence on the dividend policy.