The dividend payout ratio of India's listed companies fell to 25.7% in FY26, marking the lowest level in at least 12 years. According to reports from Business Standard, this represents a significant decline from 29.8% in FY25 and a dramatic drop from the record 61.4% in FY20 when the Covid-19 pandemic triggered sharp earnings declines. Over the past 12 years, the average payout ratio has been approximately 40%, making the current level substantially below historical norms.
The combined reported net profit of 1,495 listed firms in the sample rose 18.8% year-on-year in FY26, while adjusted net profit increased 14.9% during the year. As reported by Business Standard, the modest increase in shareholder payouts was driven entirely by a surge in share buybacks, while equity dividends declined marginally. Companies paid a combined ₹4.86 trillion in equity dividends in FY26, compared with ₹4.87 trillion in FY25, while 14 companies spent ₹19,378 crore on share buybacks, up sharply from ₹7,827.5 crore spent by 32 companies in FY25.
The increase in buybacks was almost entirely attributable to Infosys, which completed an ₹18,000 crore buyback in September last year. According to Business Standard, the company also distributed ₹19,430.4 crore in equity dividends in FY26, taking its total shareholder payout to ₹37,430.4 crore during the financial year. This represented Infosys' highest-ever annual payout and translated into a payout ratio of 127.1%, compared to 66.7% in FY25 when it returned ₹17,828 crore to shareholders entirely through dividends.
The modest growth in shareholder payouts despite double-digit earnings expansion led to a sharp rise in retained earnings, which increased 25.9% year-on-year to ₹14.66 trillion in FY26 from ₹11.64 trillion in FY25. As reported by Business Standard, the combined cash and bank balances of companies in the sample increased 12.3% to around ₹18 trillion at the end of FY26, while total investments rose 6.4% to around ₹19 trillion. In contrast, the combined fixed assets of these companies increased by just 2.1% to ₹81.91 trillion at the end of the financial year.
Among individual companies, Tata Consultancy Services remained the country's largest dividend payer despite a 12.7% decline in total shareholder payouts, distributing ₹39,820 crore in dividends for FY26 compared with a record ₹45,612 crore in FY25. According to Business Standard, Infosys ranked second with total payouts of ₹37,430.4 crore, followed by HDFC Bank (₹23,859.8 crore), ITC (₹18,167.8 crore), and Oil and Natural Gas Corporation (₹16,668.9 crore). These 10 companies accounted for 41.6% of all shareholder payouts by listed companies in FY26, up from 36% in FY25.
