India’s largest dividend pay-outs in FY26 were driven predominantly by banks, oil companies, miners, and other large public sector undertakings, reflecting a shift in corporate dividend policies and profitability across key sectors.
India’s largest dividend pay-outs in FY26 were led by banks, oil companies, miners and other businesses tied to big public sector undertakings, according to a BusinessLine analysis of Nifty 500 firms. HDFC Bank topped the list with nearly ₹21,000 crore in dividends, ahead of State Bank of India at ₹16,015 crore and HCL Technologies at ₹14,621 crore. The numbers underline how a relatively small group of large companies accounted for a disproportionate share of the market’s cash returns to shareholders.
Banks were the biggest sectoral contributors, with 23 companies distributing ₹71,858 crore in FY26, while mining firms paid out ₹34,359 crore across five companies and petroleum refiners and distributors disbursed ₹25,163 crore across eight. Ajit Mishra, senior vice-president of research at Religare Broking, told BusinessLine that better asset quality, lower credit costs, stronger profitability and comfortable capital buffers had given banks room to return surplus capital while still funding loan growth.
Among the largest individual payers, HDFC Bank raised its FY26 dividend by 40% from the previous year, while SBI increased its payout by 13% and Life Insurance Corporation of India doubled its dividend. By contrast, Vedanta cut its dividend by 21% and HCL Technologies reduced its payout by 10%. Kunal Bajaj, a research analyst at Choice Institutional Equities, said HCLTech’s lower dividend seemed more closely linked to earnings than to any change in policy, noting that FY26 profit after tax was broadly flat and that the company retained about 98% of earnings. Vedanta’s reduction, however, reflected a deliberate change in dividend policy rather than weaker profit, after the company’s board moved away from a rule requiring at least 30% of profit to be paid out, according to disclosure made by chief financial officer Ajay Goel on the post-earnings call.
Even so, Vedanta still posted the highest dividend yield at 13.2% as of September 17, followed by Angel One at 8.4% and HPCL at 6.9%. BusinessLine’s analysis showed that high absolute payouts did not necessarily translate into high yields, since almost half of the Nifty 500 had dividend yields below 1%, while only 13 companies offered yields above 5%. Mishra said aggregate dividends reached record levels in FY26, but the broader market’s payout ratio fell to 27.6% from 30.4% a year earlier because profits grew faster than distributions.
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