Tata Steel Ltd. said it may review its dividend policy sometime soon even as the company has recommended its highest payout in its history.
The company’s current capital allocation policy continues to focus on deleveraging, expansion and maximum shareholders’ return, in that particular order, Koushik Chatterjee, executive director and chief financial officer at the steelmaker, said in an interview with BloombergQuint.
The company, while announcing its fourth-quarter results, recommended a dividend of Rs 51 per fully paid equity share, its biggest payout at least since 2001. It also announced a payout of Rs 12.75 per partly paid share, besides a 10:1 stock split.
Tata Steel would want to maximise dividend returns to the shareholders as one of the capital allocation levers since this would push it to achieve higher profitability, Chatterjee said. The has company handed out 19-20% of its profit as dividend this time, which is in line with its dividend distribution policy, he said.
The company targets to pay as dividend up to 50% of profit after tax subject to the applicable rules and regulations. It has earmarked a capex of Rs 12,000 crore for the FY23, up from Rs 10,500 crore spent in the previous fiscal.