MUMBAI: Shareholders could soon expect an assured dividend from listed companies as the Securities and Exchange Board of India (Sebi) is working on a dividend distribution policy that would require profitable companies to doll out a certain percentage of their profits as dividend to shareholders.“In India there is no declared dividend policy. Shareholders are demanding a dividend policy. Nobody is asking that the entire cash should be paid, but there should be a dividend policy so that there is some amount of certainty that if a company is making an ‘X’ per centage of profit, then so much will be distributed as dividend. We are working towards it, and will take some time, it is in initial stage,” U.K. Sinha, chairman, Sebi said at a conference on corporate governance on Friday.
While noting that there is a growing investors sentiment against companies hoarding cash without rewarding investors through dividends, Mr Sinha said that the regulator is looking at a method to incentivise corporate India to have a dividend distribution policy.“The world over there is a strong demand, which you are seeing at corporate boards and in annual general meetings. There is a strong demand that cash hoarding should be discouraged,” he added.
On the new delisting regulations announced last week by the SEBI board, Mr Sinha said that the regulator has actually made it easier for the listed firms to delist their shares. Mr Sinha said that a company was earlier required to bring down its promoter holding to 75 per cent and then increase it upto 90 per cent to get delisted from the bourses. However, the new regulations have simplified the procedure, as the promoters are no longer required to go through the two-stage procedure.
“It was a two-stage process. In one stroke, we have removed that requirement. Now, if a company wants to get delisted, it can express its willingness at the beginning and the two-stage process can be done away with,” Mr Sinha added.
