Institutional EYE

Commentary on Corporate Governance Issues

Dividends: 88 companies can pay over Rs.250 bn more in dividends

Companies clearly continue to hold cash stockpiles and must consider paying higher dividends. IiAS’ study, based on FY16 financials identifies 88 companies that can pay, conservatively, Rs.276 bn in dividends. This is higher than the amount of Rs.213 bn IiAS identified in its 2016 study (based on FY15 financials). We believe SEBI’s requirement of an articulated dividend policy will force companies to think more deeply about dividend payouts. Evidence shows that Indian companies have realized the importance of dividends to shareholders: 79% of the S&P BSE 500 companies paid out dividends in FY16. While median dividend payouts have dropped marginally to 23.3% in FY16 from 24.5% in FY15, the ag

Infosys is no longer the bellwether of corporate governance in India

Infosys continues to maintain high corporate governance standards – but it is no longer a cut above the rest of corporate India. This diminution in its stature began well before Vishal Sikka’s appointment. Infosys signified corporate governance in India for the longest time. Its founder has been instrumental in developing and strengthening the corporate governance framework in India1. And while India was still trying to figure out what imbibing good corporate governance practices entailed, Infosys had steamed ahead by benchmarking itself to global players. Corporate India has changed radically since then, and one may argue that it has caught up with Infosys. Infosys’ governance standards hav

Sporting Distractions for Corporate India

Vikram Limaye’s appointment by the Supreme Court as a BCCI administrator raises concerns on his ability to focus on his primary role – that of being Managing Director and CEO of IDFC Limited. Investors should be concerned about the amount of time he spends on his additional responsibilities. Key management personnel (KMP) are required to devote all their time to the business: that is essential to their role and responsibilities. But, corporate India has been witness to a handful of distracted CEOs. Vikram Limaye’s recent appointment as a BCCI administrator by the Supreme Court is likely to distract him from his core responsibility. Not only has he become responsible to administer the recomme

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