Tata Motors, a Tata Group company, in an exchange filing, informed that it has scheduled a board meeting on Friday, May 12, 2023, to consider the proposal of declaration of a dividend on its ordinary shares and ‘A’ Ordinary shares for the financial year ended March 31, 2023. This matter will be discussed along with other matters at its forthcoming 78th Annual General Meeting.
If we take a look at the dividend history of the company, it declared a dividend seven years ago, i.e., in the year 2016. In fact, it declared a dividend every year, starting from 2003 to 2014. The highest dividend that it had paid was in the year 2011 at ₹ 20 per share.
Dividends are a part of the profits that companies share with their shareholders. They are not mandatory payments. In other words, it is not obligatory for a company to pay dividends.
Tata Motors was profitable in 2016 and it had declared a dividend of ₹ 0.20 per share in 2016. However, it did not pay any dividends in the years 2015, 2017 and 2018, though it was profitable. The company has been making losses since the financial year 2019 and this might be a reason why it did not pay a dividend.
With a market capitalization of ₹ 1,72,020 crores, Tata Motors is a large-cap automobile company. Its diverse portfolio includes a range of cars, sports utility vehicles, trucks and defence vehicles. Moreover, its portfolio includes vehicles manufactured under the Jaguar Land Rover Brands. In addition, it operates in information technology, machine tools and factory automation solutions.
According to the shareholding pattern of the company, its promoters hold a 46.39% stake in it, followed by retail investors with 21.34%, foreign institutions with 15.34%, mutual funds with 8.98% and other domestic institutions with 7.95%.
The company has been loss-making and has a negative return on equity of 22.93%. It is in a capital-intensive industry and therefore has a high debt-to-equity ratio of 5.52. At 01:51 PM on Friday, its shares were trading at ₹ 479.60 apiece.
Written by Simran Bafna
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