22 Indian firms declared dividends despite losses in FY25: Report
What's the story
A recent analysis has revealed that at least 22 companies in India have declared dividends despite posting standalone losses in the fiscal year ending in 2025.
The Companies Act mandates that dividends can only be declared from current profits or reserves, but these firms have opted for payouts from their accumulated earnings, Moneycontrol reports.
EID Parry India tops the list with a whopping 900% dividend declaration.
Top payers
EID Parry and Edelweiss lead list of dividend payers
EID Parry India announcement translates to ₹9 per share on a face value of Re 1.
The company plans to distribute ₹160 crore as dividends, with promoters holding a 41.6% stake set to receive nearly ₹66.6 crore.
Edelweiss Financial Services has also proposed a 150% dividend or ₹1.5 per share, amounting to ₹138 crore in total distribution and over ₹45 crore for its promoters who hold a 32.7% stake.
Additional payers
Other notable companies on this list
Other companies such as Aditya Birla Real Estate and SH Kelkar & Co have also declared dividends of ₹22.4 crore and ₹13.8 crore, respectively, even though they posted standalone losses of ₹15 crore and ₹13.5 crore, respectively, in FY25.
Majestic Auto announced a dividend of ₹10.4 crore despite reporting a loss of ₹3.4 crore for the fiscal year 2025, with promoters set to receive ₹7.8 crore from this payout decision.
Regulatory safeguards
Lender approval needed for dividends from accumulated profits
Experts have said that loss-making companies need to seek lender approval before declaring dividends. This is part of regulatory safeguards against imprudent distributions.
Also, irrespective of profit or loss status, companies need to comply with statutory requirements and consider strategic factors like growth plans, stock valuation, and geopolitical developments affecting operating costs while deciding on dividend declarations.
Dividend regulations
Key points regarding dividend payout from accumulated profits
There is no cap on dividends paid from accumulated profits of earlier years, but distributions from general reserves are subject to stricter limits on both quantum and rate.
In either case, companies must account for depreciation and adjust any current or past losses before distributing dividends.
Further, dividend payout from general reserves requires shareholder approval, while those drawn from prior-year profits may be declared as interim dividends by the board without such approval.