ONGC DIVIDEND POLICY
•Priyanka Atri •Vaishali Bhagat •Rucha Dave •Vishva Dave •Amber Maheshwari •Drashty Parikh
FLOW OF PRESENTATION
o Introduction of dividend
o Factors affecting dividend policy
o Significance and danger of dividend policy
o Forms of dividend policy
o Types of dividend policy
o Introduction of ONGCo Dividend summaryo Dividend paido ONGC dividend policyo How many times
ONGC pays dividend in a year.
o Dividend Rate & Dividend Payout Ratio
o Conclusion
INTRODUCTION OF DIVIDEND
Meaning: Dividend is that part of the profits of a company which is distributed amongst its shareholders.
Definition: According to ICAI, "Dividend is a distribution to shareholders out of profits or reserves available for this purpose."
FACTORS AFFECTING DIVIDEND POLICY
There are mainly two factors affecting dividend policy:
1. External factors.2. Internal factors.
1) EXTERNAL FACTORS AFFECTING DIVIDEND POLICY
General state of economy. State of capital market. Legal restrictions. Contractual restrictions.
2) INTERNAL FACTORS AFFECTING DIVIDEND POLICY
Desire of the shareholders. Financial needs of the company. Nature of earnings. Desire to retain the control of management. Liquidity position.
TYPES OF DIVIDEND POLICY
Regular dividend policy Stable dividend policy 1. Constant dividend per share
2. Constant payout ratio3. Stable rupee dividend plus extra dividend.
Irregular dividend policy No dividend policy
FORMS OF DIVIDEND POLICY
1. Cash dividend2. Stock dividend3. Bond dividend4. Property dividend
INTRODUCTION OF ONGC ONGC is India's leading oil & gas exploration
company. produced more than 600 million metric tonnes of
crude oil. India's highest profit making corporate. It has a share of 77 percent in India's crude oil
production and 81 per cent in India's natural gas production.
It has fully owned subsidiary, ONGC Videsh Ltd (OVL) that looks for exploration opportunities in other parts of the world.
ONGC has also acquired 72% stake in MRPL with full management control of the 9.69 tonne, state-of-the-art refinery.
DIVIDEND SUMMARY
For the year ending March 2012, Oil and Natural Gas Corporation has declared an equity dividend of 195.00% amounting to Rs 9.75 per share. At the current share price of Rs 299.85 this results in a dividend yield of 3.25%.
The company has a good dividend track report and has consistently declared dividends for the last 5 years.
Announcement dates
Effective dates
Dividend type
Dividend remarks (%)
Dividend per share
29-01-13 22-03-13 Interim 80.00Rs.4.0000 per share (80%)
2nd Interim Dividend
04-12-12 24-12-12 Interim 100.00Rs.5 per share
(100%)Interim Dividend
29-05-12 14-09-12 Final 40.00Rs.2 per share (40%)Final
Dividend
15-02-12 19-03-12 Interim 30.00Rs.1.50 per share (30%)2Nd
Interim Dividend
02-12-11 06-01-12 Interim 125.00 -
31-05-11 18-08-11 Final 15.00Rs.0.75 per share
(15%)Final Dividend
01-12-10 20-12-10 Interim 320.00 Special Interim Dividend
31-05-10 09-09-10 Final 150.00 -
30-11-09 22-12-09 Interim 180.00 -
25-06-09 11-09-09 Final 140.00 -
05-12-08 23-12-08 Interim 180.00 -
25-06-08 08-09-08 Final 140.00 AGM
DIVIDEND PAID
1st April,
2010 to
31st
March,
2011
1st April,
2009 to
31st
March,
2010
1st April,
2008 to
31st
March,
2009
1st April,
2007 to
31st
March,
2008
1st April,
2006 to
31st
March,
2007
1st April,
2005 to
31st
March,
2006
1st April,
2004 to
31st
March
2005
1st April,
2003 to
31st
March
2004
1st April,
2002 to
31st
March
2003
1st April,
2001 to
31st
March
2002
1st April,
2000 to
31st
March
2001
Face Value
of equity
shares (Rs.
per share)
5 10 10 10 10 10 10 10 10 10 10
Dividend(
Rs. in
millions)
74,861 70,583 68,444 68,444 66,305 64,167 57,037 34,222 42,778 19,963 15,685
Dividend
rate175% 330% 320% 320% 310% 450% 400% 240% 300% 140% 110%
Dividend
Payout
Ratio
39.56% 42.09% 42.44% 40.98% 42.39% 44.47% 43.90% 39.50% 40.60% 32.20% 30.00%
Dividend
tax(Rs. in
millions)
12,156 11,616 11,632 11,632 10,125 9,000 7,763 4,385 2,375 -- 1,600
PAT (RS. IN MILLION)
2OO7 2008 2009 2010 20110
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
156,429
167,016161,263
167,676
189,240
Series 1
Series 1
ONGC DIVIDEND POLICY
Dividend Earning per share Book closure period Dividend payment date Dividend payout ratio
DIVIDEND POLICY The policy a company uses to decide how much it will pay out to
shareholders in dividends:
Factors to consider while deciding dividends: Future capital expenditure plans, profits earned during the
financial year, cost of raising funds from alternate sources, cash flow position and applicable taxes including tax on dividends.
As per govt.’s guidelines, all profit-making PSUs in oil sector (like ONGC) should declare the higher of a minimum dividend of 30 % on equity or a minimum dividend payout of 30 % of post-tax profit.
Since company has maintained 40% payout ratio for last 10 years, it is safe to assume that same would be maintained in future too. Since great companies generally increase their earnings over years, it can be safely assumed that dividends would increase in years to come.
HOW MANY TIMES ONGC PAYS DIVIDEND IN A YEAR? In last 8 years, ONGC has paid
dividends twice every year. Interim dividend (generally higher than final
dividend) is paid in December. This is followed by Final Dividend paid in
September.
DIVIDEND RATE & DIVIDEND PAYOUT RATIO
Regular dividend payer and this notion is validated by data
Consistently paying dividends for more than 10 years.
The table below shows the dividend rates (as % of face value). The great thing is that the dividends have been continuously increasing during the last 5 years.
A company with high dividend payout ratio can mean two things:
Either the company has no future investment plans OR
high dividend payouts are temporary (due to some asset sale) and hence not sustainable.
maintained a very stable payout ratio of 40% i.e. it shares 40% of its earnings with investors as dividends.
balancing its growth (investment) plans and wealth sharing objective on a consistent basis.
Dividend rate (%) Dividend payout ratio (%)
Dividend Rate (%) ↓
Dividend Payout ratioD
CONCLUSION
Consistent dividend policy Moderate but steady increase in dividend
payment according to the profits declarations.
Main advantage to shareholders is that they have stable dividend policy.
Low fluctuation in dividend policy The highest dividend rate paid by the
company is 450% in the year 2005-06 and the lowest was in year 2001-02 140%.
THANK YOU