An Empirical Study on Factors Influencing on Dividend Payout in India with Respect to NIFTY 50 Companies

Abstract

This article examined the factors influencing the dividend payout of Non financing and non-banking companies listed in NIFTY 50 India.  Generating profit is one of the key characteristics of the successful firms. So, when these profits are attained firms distribute profits with their shareholders (investor’s) in the form of dividends. So here we are going to see the various factors which are influencing the dividend payout in India’s NIFTY Fifty. This study covers for the tenure of 5 financial years (2018 - 2023). Various theoretical models have been developed by academicians and researchers to empirical examine the impact of factors on dividend payout ratios of different companies, and it is also suggested that managers should use these models while making decision for dividend payments, Grullon et al. (2002). So, in this paper we are going to find the various factors influencing the dividend payout, and we are also going to draw the conclusion by using Descriptive Statistics, Correlation, Simple Regression and Panel Data Analysis. Companies with higher ROE tend to exhibit higher dividend payout ratios, underscoring the role of profitability as a strong driver of dividend distribution policies. Conversely, the Debt-to-Equity Ratio (DE Ratio) consistently demonstrates a negative relationship with DP Ratio, implying that companies with higher debt levels relative to equity tend to have lower dividend payout ratios. This emphasizes the impact of financial leverage on dividend decisions, as firms with substantial debt obligations prioritize debt servicing over dividend payments.