Dividend Practice of Public Sector Under takings: A Case Study of Mining Sector of India

Dividend decision has been a subject of sincere concern for researchers and financial experts for more than five decades. The questions of “how much dividend should be paid and what factors determine dividend payout decision” have puzzled the researchers and decision makers. The present paper is the outcome of a study of public sector undertakings belonging to mining industry in India. The study is aimed to bring out the dividend pattern and determinants of the public sector firms. It also examines the application of Lintner's dividend model in PSUs in India. The study involves a period of 10 years (i.e. 20042013). The findings indicate that around one-third of the profits after tax is distributed as dividend by the sample companies. The study further showed that current year earnings and lagged dividends have positive relationship with dividend payouts in the current year.