New Delhi, Aug. 16 -- Indian companies paid shareholders a record Rs.5.13 trillion in dividends in fiscal year 2026 (FY26), but this increase masks a striking shift: dividends grew slower than profits. The payout ratio fell to a 12-year low, raising questions about whether corporate India is finally retaining more cash for investment. Mint explains.

Dividend payouts by BSE 500 companies rose 8.2% year-on-year to Rs.5.13 trillion in FY26, from Rs.4.74 trillion in FY25. But dividend growth has slowed: it was 11.9% in FY25 and 9.6% in FY24. More significantly, dividends as a share of net profit fell to 27.6% in FY26 from 30.4% in FY25 and 36.5% in FY23. The ratio is now at its lowest in 12 years, substantially below its 12-year average of a...