5 Largecap Dividend Paying Companies in India

There is no denying the pandemic-led situation intensified the stock market volatility last year.

Despite the huge volatility and the Covid-19 uncertainties, Indian markets witnessed a retail rush as many individual investors opened new demat accounts.

According to The Economic Times, demat accounts at Central Depository Services (CDSL) crossed a record 40 m in June 2021, underscoring the growing influence of retail investors in equities.

With this, the total number of demat accounts in India held by CDSL and National Securities Depository (NSDL) have risen to 60 m as on June 2021.

The surge in Covid-19 cases and lockdown across the country prompted individual investors to venture directly into the market and provided an opportunity to earn better returns by investing in good companies.

To avoid market fluctuations and price risk, one should think about investing in quality dividend-paying stocks to diversify their portfolios for stable income.

Investors want dividend income as a passive source of income to stay away from the daily involvement in the stock market.

A dividend is a great way to earn returns from one's investments. A dividend is paid out by the company in order to reward shareholders over and above capital gains.

Dividends are generally paid out of the profits company generates through its operations.

Let's take a look at best dividend paying stocks in India.

#1. Coal India

Coal India (CIL) is an Indian government-owned coal mining and refining corporation. It is under the ownership of Ministry of Coal, Government of India headquartered in Kolkata.

It's the largest coal-producing company in the world and a Maharatna public sector undertaking. The company contributes around 82% to the total coal production in India.

In the last ten years, Coal India has declared 18 dividends.

Coal India reported an additional final dividend of Rs 3.5 which translates into 35% per equity share of face value Rs 10 each for the financial year ending 31 March 2021.

The central government will receive Rs 14.3 bn as a dividend from Coal India. The total dividend payout for the whole financial year 2020-21 stood at Rs 16 per share or 160%.

Coal India's dividend yield stands at 11.7%

Coal India Dividend Payout History - Last 10 Years

Year	Dividend (Rs)
FY2020-21	16
FY2019-20	12
FY2018-19	13
FY2017-18	16.5
FY2016-17	19.9
FY2015-16	27.4
FY2014-15	20.7
FY2013-14	33.3
FY2012-13	10.2
FY2011-12	9.9

Source: Equitymaster

#2. Bajaj Auto

Bajaj Auto is an Indian multinational two-wheeler and three-wheeler manufacturing company based in Pune.

It manufactures motorcycles, scooters and auto rickshaws. Bajaj Auto is a part of the Bajaj group. It's the world's third-largest manufacturer of motorcycles and the second-largest in India.

Since 2011, Bajaj Auto has declared 15 dividends.

For the year ending March 2021, Bajaj Auto has declared an equity dividend of 1,400% amounting to Rs 140 per share.

The company's dividend yield stands at 4.4%.

Bajaj Auto Dividend History - Last 10 Years

Year	Dividend (Rs)
FY2020-21	140
FY2019-20	180
FY2018-19	60
FY2017-18	55
FY2016-17	5
FY2015-16	100
FY2014-15	50
FY2013-14	45
FY2012-13	45
FY2011-12	40

Source: Equitymaster

#3. ITC

Established in 1910 as the Imperial Tobacco Company of India, the company was renamed as the India Tobacco Company (ITC) in 1974.

ITC has a diversified presence across industries such as cigarettes, FMCG, hotels, packaging, paperboards & specialty papers, and agribusiness.

The company has a total of 13 businesses in 5 segments. Also, there are 90 countries to which ITC exports its products. Its products are available in 6 million retail outlets.

Revenue from operations rose 36% to Rs 142.4 bn against Rs 104.8 bn in the year-ago period.

In the last decade, ITC has declared around 13 dividends.

The FMCG major has declared a final dividend of Rs 5.75 per ordinary share of Rs 1 each for the financial year ended 31 March 2021.

The above final dividend is in addition to the interim dividend of Rs 5 per share declared by the Board on 11 February 2021, total dividend for the year 2021 sums up to Rs 10.75 per share.

Dividend yield of the company is 5.4%

ITC Dividend History - Last 10 Years

Year	Dividend (Rs)
FY2020-21	10.75
FY2019-20	10.15
FY2018-19	5.75
FY2017-18	5.15
FY2016-17	8.5
FY2015-16	6.25
FY2014-15	6
FY2013-14	5.25
FY2012-13	4.5
FY2011-12	4.45

Source: Equitymaster

#4. Hindustan Zinc

Hindustan Zinc (HZL) is an Indian integrated mining and resources producer of zinc, lead, silver, and cadmium. It's a subsidiary of Vedanta group.

The company is one of the world's largest integrated producers of zinc and is among the leading global lead and silver producers.

Over the last 10 years, the company has announced 27 dividends.

For the year ending March 2021, Hindustan Zinc has declared an equity dividend of 1,065% amounting to Rs 21.3 per share. In the same year, the company had announced an interim dividend of Rs 16.5 apiece.

Hindustan Zinc dividend yield stands at 8.8%.

Hindustan Zinc Dividend History - Last 10 Years

Year	Dividend (Rs)
FY2020-21	37.8
FY2019-20	-
FY2018-19	20
FY2017-18	8
FY2016-17	53.4
FY2015-16	6.3
FY2014-15	3.8
FY2013-14	3.1
FY2012-13	2.5
FY2011-12	2.5

Source: Equitymaster

#5. HCL Technologies

HCL Technologies is a leading global IT services company that helps global enterprises re-imagine and transform their businesses through digital technologies.

The company is primarily engaged in providing a range of software services, business process outsourcing, and infrastructure services. It's a subsidiary of HCL Enterprise.

The company has offices in 50 countries including United Kingdom, United States, France, and Germany with a worldwide network of research and development (R&D), 'innovation labs' and 'delivery centers', over 1.7 lakh employees.

Its customers include 250 of the Fortune 500 and 650 of the Global 2,000 companies. HCL Technologies is also on the Forbes Global 2,000 list.

Since 2011, HCL Technologies has declared around 46 dividends.

It has declared an equity dividend of 500% amounting to Rs 10 per share for the year ending March 2021.

Dividend yield of the company is 1.4%

HCL Technologies Dividend History - Last 10 Years

Year	Dividend (Rs)
FY2020-21	34
FY2019-20	8
FY2018-19	8
FY2017-18	12
FY2016-17	24
FY2015-16	20
FY2014-15	30
FY2013-14	14
FY2012-13	10
FY2011-12	10

Source: Equitymaster

Apart from the above top 5 stocks, given below is the list of more dividend paying stocks to watch out for in India.

Stocks	Share Price	Dividend Yield (%)
HPCL	259.6	10.8%
Indian Oil Corporation	107.4	13.6%
Infosys	1,697.9	2.7%
GAIL	145.8	4.3%
Wipro	632.2	0.3%
HDFC Bank	1,568.1	0.5%
BPCL	472.6	4.1%

Source: Equitymaster

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

It's calculated by dividing annual dividend per share with the current share price of the company.

Dividend Yield =

Dividend Per Share --------------------------------- Current Share Price

Why you should invest in dividend paying stocks

Investing in dividend yield stocks is one of the ways of creating wealth and receiving a steady stream of income.

Dividend-paying stocks allow investors to profit in two ways: stock price appreciation and payouts made by the company.

Every individual invests in several types of assets, so the risks associated with each is also different.

Basically, investing in dividend paying stocks is a suitable option for those people who want a stable source of income and who want to stay away from stock price volatility.

Also, the benefit of buying dividend stocks is that the uncertainty of returns becomes low because the company pays a dividend at regular intervals.

But before picking such stock in the hope of earning dividends, one should make it a point to go through its financial statements, look at its dividend payment history and check out its market reputation.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...