Emerging pattern of dividend in India since 1991

Dividend decision is one of the most important functions of finance manager of joint stock companies. The relevance of the subject emanates from the long debate about the relationship between payout and valuation of the firm. Since 1991, the year of initiation of financial sector reforms and the liberalization process Indian corporate sector have experienced sea changes in connection to business policies and strategies. In this paper, an attempt has been made to bring out the changes taking place regarding dividend practices of Joint Stock Companies in India. This study is based on secondary data for a period of 16 years from the year 1991 to 2006. Beside others, the study brings out that the average dividend payout ratio has been ranging from 17.49 percent to 34.91 percent over the study period and no significance variation exists across the industries in so far as dividend payout ratio is concerned. However both dividend per share and average dividend paid by various industries differs significantly.