Nirma Limited “Dividend Policy And Other Payouts Including Buyback And Stock Repurchases”
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NIRMA LIMITED-“Dividend Policy and other Payouts including Buyback and Stock Repurchases” NIRMA LIMITED Dividend Policy: Dividends- Nirma Ltd. Year Rate (%) Face Value Dividend/Share Type BSE ex-div date Mar 1994 20 10 2.00 Final 12-Sep-94 Mar 1995 20 10 2.00 Final 4-Dec-95 Mar 1996 25 10 2.50 Final Mar 1997 25 10 2.50 Final 21-Jul-97 Mar 1998 30 10 3.00 Final 1-Jun-98 Mar 1999 30 10 3.00 Final 31-May-99 Mar 2000 25 10 2.50 Interim 3-Apr-00 Mar 2000 10 10 1.00 Final 7-Jul-00 Mar 2001 35 10 3.50 Final 2-Jul-01 Mar 2002 35 10 3.50 Final 14-Aug-02 Mar 2003 40 10 4.00 Final 22-Jul-03 Mar 2004 40 10 4.00 Final 14-Sep-04 Mar 2005 50 10 5.00 Final 9-Sep-05 Mar 2006 75 10 7.50 Final 13-Sep-06 Mar 2007 80 5 4.00 Interim 14-Mar-07 Mar 2008 80 5 4.00 Final 18-Sep-08 Nirma has had a healthy dividend policy (since 1994) as indicated by the above figures. In the last few years, Nirma has tried to maintain a Dividend/ Share of (around) Rs. 4. Nirma has had good cash flow from operations, healthy reserves and low debt (hence low interests), which explains for the good dividends. Apart from the above dividend on the equity shares, Nirma has been declaring dividends on its Preference shares @ 6% i.e. Rs.6/- per share (on 279285 Redeemable Non- cumulative Non-convertible Preference shares of Rs.100/-) for the last 4 years. Nirma paid Interim dividend in 2007 to avoid the higher dividend tax announced in that year’s budget (dividend distribution tax would go up from 12.5 per cent to 15 per cent from the financial year 2007 beginning April 1- Annual Budget 2007.) The healthy dividends help the shareholder stick to the shares of the company.
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Transcript of Nirma Limited “Dividend Policy And Other Payouts Including Buyback And Stock Repurchases”
- 1. NIRMA LIMITED-Dividend Policy and other Payouts including Buyback and StockRepurchases NIRMA LIMITEDDividend Policy: Dividends- Nirma Ltd.YearRate (%)Face Value Dividend/ShareTypeBSE ex-div date Mar 19942010 2.00 Final12-Sep-94 Mar 19952010 2.00 Final4-Dec-95 Mar 19962510 2.50 Final Mar 19972510 2.50 Final21-Jul-97 Mar 19983010 3.00 Final1-Jun-98 Mar 19993010 3.00 Final31-May-99 Mar 20002510 2.50Interim 3-Apr-00 Mar 20001010 1.00 Final 7-Jul-00 Mar 20013510 3.50 Final 2-Jul-01 Mar 20023510 3.50 Final14-Aug-02 Mar 20034010 4.00 Final22-Jul-03 Mar 20044010 4.00 Final14-Sep-04 Mar 20055010 5.00 Final9-Sep-05 Mar 20067510 7.50 Final13-Sep-06 Mar 200780 5 4.00Interim 14-Mar-07 Mar 200880 5 4.00 Final18-Sep-08 Nirma has had a healthy dividend policy (since 1994) as indicated by the above figures.In the last few years, Nirma has tried to maintain a Dividend/ Share of (around) Rs. 4.Nirma has had good cash flow from operations, healthy reserves and low debt (hencelow interests), which explains for the good dividends.Apart from the above dividend on the equity shares, Nirma has been declaring dividendson its Preference shares @ 6% i.e. Rs.6/- per share (on 279285 Redeemable Non-cumulative Non-convertible Preference shares of Rs.100/-) for the last 4 years.Nirma paid Interim dividend in 2007 to avoid the higher dividend tax announced inthat years budget (dividend distribution tax would go up from 12.5 per cent to 15 percent from the financial year 2007 beginning April 1- Annual Budget 2007.)The healthy dividends help the shareholder stick to the shares of the company.
2. Stock Splits and Buybacks: Stock Split 14th March, 2007Nirma opted for a stock split in the ratio 2:1 which was executed on 14th March, 2007. The face value was reduced to Rs. 5 per share from Rs. 10 per share. The number of shares doubled from 79384684 to 159142282. Share prices halved on that day (as indicated by the above graph). Nirma had gone for a stock split because-o It acquired Core Healthcare Ltd. in FY 2007 and it was decided that: Core healthcare will get one Nirma share for every 235 partly paid-upshares. Also, Core healthcare will get one Rs 5 Nirma share for every 80 held. o To bring about improvement in terms of liquidity in the script of the Company.Nirma hasnt had any buyback in the recent past. 3. HENKEL INDIADividend Policy, Stock Splits and Buybacks: Dividends-Henkel India Ltd.YearRate(%)Face ValueDividend/Share Dividend typeMar 19970 10 0FinalMar 1998 10010 10InterimMar 19987010 7FinalMar 19992510 2.5FinalMar 20000 10 0FinalMar 20010 10 0FinalDec 20010 10 0FinalDec 20020 10 0FinalDec 20030 10 0FinalDec 20040 10 0FinalDec 20050 10 0Final Henkel India had a poor Dividend Policy as indicated above. The explanation of no dividends is that the firm is reinvesting its reserves in expansion and is thus refraining from giving dividends. Henkel also has poor cash flows from operations, high debts (1:1 debt-equity ratio) and low profits. Only in the FY1998 and FY 1999, dividends were given out. There is no record of Stock Splits and Buybacks by Henkel India in the past.Comments: Nirma Ltd. has good cash flows from operations for the past many years resulting in increased reserves (of the tune of Rs. 2500 Crores). This has helped Nirma to have a strong Dividend Policy in the past years. It also has preference share holders who get 6% dividend annually. Nirma went for a stock split in FY 2007 to supplement its acquisition of Core Healthcare Ltd. and enhance liquidity in the market Henkel, on the other hand, has a very weak Dividend Policy. The major reason being that the company has weak operations and low margins.
