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Perhaps the decision to declare final dividend was to provide some relief to the investors and to bring cheer to the Stock market.
Incidentally, these companies have already paid a handsome interim dividend —TCS had paid an interim dividend of 67 per share and has further recommended a final dividend of ₹6 a share.
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It was mentioned that the restriction on dividend payments would be reviewed after September 2020.
Unlike the IT companies, banks in India have made provisions for potential impact of Covid-19.
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HDFC Bank has reported a lower other income to the tune of ₹ 450 crore in the fourth quarter FY20.
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For example, IndusInd Bank has made a provision of 23 crore towards impact of moratorium.
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However, the overall Covid-related provisions made by the four leading private sector banks (Axis bank, HDFC Bank, ICICI Bank and IndusInd Bank) were to the tune of ₹ 7,558 crore.It is expected that Indian companies while filing their financial results for FY20 would adequately address the Covid-19 related concerns and its impact on the asset quality.
It would be better if corporate India refrains from distributing largesse to shareholders at this moment.
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