ONGC DIVIDEND POLICY

Priyanka Vaishali Rucha Vishva Amber

Atri

Bhagat

Dave

Dave
Maheshwari Parikh

Drashty

FLOW OF PRESENTATION
o

Introduction of dividend Factors affecting dividend policy Significance and danger of dividend policy Forms of dividend policy Types of dividend policy

o
o o o

Introduction of ONGC Dividend summary Dividend paid ONGC dividend policy How many times ONGC pays dividend in a year. Dividend Rate & Dividend Payout Ratio Conclusion

INTRODUCTION OF DIVIDEND
Meaning: Dividend is that part of the profits of a company which is distributed amongst its shareholders. Definition: According to ICAI, "Dividend is a distribution to shareholders out of profits or reserves available for this purpose."

FACTORS AFFECTING DIVIDEND POLICY

1. 2.

There are mainly two factors affecting dividend policy: External factors. Internal factors.

1) EXTERNAL FACTORS AFFECTING DIVIDEND

POLICY

General state of economy. State of capital market. Legal restrictions. Contractual restrictions.

2) INTERNAL FACTORS AFFECTING DIVIDEND

POLICY

Desire of the shareholders. Financial needs of the company. Nature of earnings. Desire to retain the control of management. Liquidity position.

TYPES OF DIVIDEND POLICY

Regular dividend policy Stable dividend policy 1. Constant dividend per share 2. Constant payout ratio 3. Stable rupee dividend plus extra dividend. Irregular dividend policy No dividend policy

FORMS OF DIVIDEND POLICY

1.

2.
3. 4.

Cash dividend Stock dividend Bond dividend Property dividend

INTRODUCTION OF ONGC

ONGC is India's leading oil & gas exploration company. produced more than 600 million metric tonnes of crude oil. India's highest profit making corporate. It has a share of 77 percent in India's crude oil production and 81 per cent in India's natural gas production. It has fully owned subsidiary, ONGC Videsh Ltd (OVL) that looks for exploration opportunities in other parts of the world. ONGC has also acquired 72% stake in MRPL with full management control of the 9.69 tonne, state-of-the-art refinery.

DIVIDEND SUMMARY
For the year ending March 2012, Oil and Natural Gas Corporation has declared an equity dividend of 195.00% amounting to Rs 9.75 per share. At the current share price of Rs 299.85 this results in a dividend yield of 3.25%. The company has a good dividend track report and has consistently declared dividends for the last 5 years.

Announceme nt dates
29-01-13

Effective dates
22-03-13

Dividend type

Dividend remarks (%)

80.00

Dividend per share

Rs.4.0000 per share (80%) 2nd Interim Dividend Rs.5 per share (100%)Interim Dividend

Interim

04-12-12

24-12-12

Interim

100.00

29-05-12

14-09-12

Final

40.00 Dividend Rs.1.50 per share (30%)2Nd

Rs.2 per share (40%)Final

15-02-12 02-12-11 31-05-11 01-12-10 31-05-10 30-11-09 25-06-09 05-12-08 25-06-08

19-03-12 06-01-12 18-08-11 20-12-10 09-09-10 22-12-09 11-09-09 23-12-08 08-09-08

Interim Interim Final Interim Final Interim Final Interim Final

30.00 Interim Dividend 125.00 15.00 (15%)Final Dividend 320.00 150.00 180.00 140.00 180.00 140.00 Special Interim Dividend AGM Rs.0.75 per share

1st April, 2010 to 31st

1st April, 2009 to 31st

1st April, 2008 to 31st

1st April, 2007 to 31st March, 2008

1st April, 2006 to 31st March, 2007

1st April, 2005 to 31st March, 2006

1st April, 2004 to 31st March 2005

1st April, 2003 to 31st March 2004

1st April, 2002 to 31st March 2003

1st April, 2001 to 31st March 2002

1st April, 2000 to 31st March 2001

DIVIDEND PAID
March, 2011 March, 2010 March, 2009 Face Value of equity shares (Rs. per share) 5 10 10

10

10

10

10

10

10

10

10

Dividend(

Rs. in
millions) Dividend rate Dividend Payout Ratio Dividend tax(Rs. in millions)

74,861

70,583

68,444

68,444

66,305

64,167

57,037

34,222

42,778

19,963

15,685

175%

330%

320%

320%

310%

450%

400%

240%

300%

140%

110%

39.56%

42.09%

42.44%

40.98%

42.39%

44.47%

43.90%

39.50%

40.60%

32.20%

30.00%

12,156

11,616

11,632

11,632

10,125

9,000

7,763

4,385

2,375

--

1,600

PAT (RS. IN MILLION)

Series 1
200,000 180,000 167,016 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 156,429 189,240

167,676
161,263

Series 1

2OO7

2008

2009

2010

2011

ONGC DIVIDEND POLICY

Dividend Earning per share Book closure period Dividend payment date Dividend payout ratio

DIVIDEND POLICY

The policy a company uses to decide how much it will pay out to shareholders in dividends: Factors to consider while deciding dividends: Future capital expenditure plans, profits earned during the financial year, cost of raising funds from alternate sources, cash flow position and applicable taxes including tax on dividends. As per govt.s guidelines, all profit-making PSUs in oil sector (like ONGC) should declare the higher of a minimum dividend of 30 % on equity or a minimum dividend payout of 30 % of post-tax profit. Since company has maintained 40% payout ratio for last 10 years, it is safe to assume that same would be maintained in future too. Since great companies generally increase their earnings over years, it can be safely assumed that dividends would increase in years to come.

HOW MANY TIMES ONGC PAYS DIVIDEND IN A YEAR?

In last 8 years, ONGC has paid dividends twice every year. Interim dividend (generally higher than final dividend) is paid in December. This is followed by Final Dividend paid in September.

DIVIDEND RATE & DIVIDEND PAYOUT RATIO

Dividend rate (%) Dividend payout ratio (%)

Regular dividend payer and this notion is validated by data Consistently paying dividends for more than 10 years. The table below shows the dividend rates (as % of face value). The great thing is that the dividends have been continuously increasing during the last 5 years.

A company with high dividend payout ratio can mean two things: Either the company has no future investment plans OR high dividend payouts are temporary (due to some asset sale) and hence not sustainable. maintained a very stable payout ratio of 40% i.e. it shares 40% of its earnings with investors as dividends. balancing its growth (investment) plans and wealth sharing objective on a consistent basis.

Dividend Rate (%)

Dividend Payout ratio

D

CONCLUSION

Consistent dividend policy Moderate but steady increase in dividend payment according to the profits declarations. Main advantage to shareholders is that they have stable dividend policy. Low fluctuation in dividend policy The highest dividend rate paid by the company is 450% in the year 2005-06 and the lowest was in year 2001-02 140%.

THANK YOU