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Dividend Policies of Birla Sun Life and Ambuja Cement: Financial Management
Dividend Policies of Birla Sun Life and Ambuja Cement: Financial Management
TOPIC:-
MASTER’S DEGREE IN
BUSINESS ADMINISTRATION
Of
ACKNOWLEDGEMENT
First and foremost, I thank the Almighty God for sustaining the enthusiasm with which
plunged into this endeavor.
I avail this opportunity to express my profound sense of sincere and deep gratitude to
many people who are responsible for the knowledge and experience I have gained during the
term paper work.
I extend my overwhelming gratitude to Ms. NEHA TIKOO, for her valuable guidance and meticulous
supervision during the preparation of this Report.
My hearty and inevitable thanks to all the respondents who is helped me to bring out the term paper in
a successful manner.
Last but not the least; I extend my gratitude towards my, faculties and friends who extended their
wholehearted support towards the successful completion of this term paper Work.
NEHA MAHENDRU
MBA (194)
SECTION-T1902
REG.NO.-10907171
But the company’s most distinctive attribute is its approach to the business.
Ambuja believes its most valuable assets aren’t cement plants. They are the people who run the
plants. This unique vision is encapsulated in the company’s homegrown philosophy of giving
people the authority to set their own targets, and the freedom to achieve their goals. It’s called
‘I can’’ This simple vision has created an environment where there are no limits to excellence,
no limits to efficiency.And has proved to be a powerful engine of growth for the company.
Be it transportation, plant efficiency, brand building or human resource development.
The Company also operates a Hotel through its subsidiary GGL Hotel and Resort Company. It
has shown innovation in utilizing measures like sea transport, captive power plants, and
imported coal and availing of govt. sops and subsidies to constantly check the costs.
The company has entered into a strategic partnership with Holcim, the second largest cement
manufacturer in the world. Holcim had, in January, bought a 14.8 per cent promoters` stake in
the GACL for INR 21.4 billion.
Currently (2010) Holcim holds about 46% of shares in Ambuja Cements Limited.
The shares of the company are traded publicly on the Bombay stock Exchange (BSE) and the
National Stock Exchange (NSE). Following are the codes assigned to Ambuja Cement Limited
BSE:500425
NSE:AMBUJACEM
Bloomberg:ACEM:IN
Reuters:GACM.BO
Technical Details
Established – 1986.
Total Capacity – 15 million tonnes.
Infrastructure – Dedicated port at Gujarat. Capable of berthing 40,000 DWT
vessels with carrying capacity of 20,000 tonnes.
Packing terminals at Mumbai, Surat and Sri Lanka.
Seven dedicated bulk cement ships.
Dividend given by Ambuja cement is good from the shareholder’s point of view. It is because
Rs. 5-6 per share, semi annually is a good dividend, as the share price of Ambuja cement is
Rs.112 .Having a share of Ambuja cement of Rs.112 and semi-annually dividend declaration is
good for shareholders benefit point of view. Some shareholders think that if the share price is
less it means less investment in one company and according to them it is good.. But it is the
individual choice whether he wants more dividends or less investment. Overall dividend given
by Ambuja cement is good.
Birla Sun Life Asset Management Company
Limited
Birla Sun Life Mutual Fund follows a conservative long-
term approach to investment, which is based on identifying
companies that have good credit-worthiness and are
fundamentally strong. It places a lot of emphasis on quality
of management and risk control. This is done through
extensive analysis that includes factory visits and field
research. It has one of the largest team of research analysts
in the industry. The company is one of India's leading,
private mutual funds with a large customer base. It has been
recognized nationally with coveted awards.
Birla Sun Life Distribution Company Limited
At Birla Sun Life Distribution, we put knowledge, expertise
and experience to good use to preserve, nurture and nourish
your wealth. For your today and your tomorrow.
They are a part of the Joint Venture between The Aditya
Birla Group and Sun Life Financial of Canada.
It is said that: "To acquire wealth is difficult, to preserve
it more difficult, but to nourish it wisely, the most
difficult of all."
.
One hundred thousand investors country wide
1500 Plus Business Associates
Business across all important segments: Institutional,
Private Client Group and Retail
National presence in 13 cities
Emerged strongly in Life Insurance and advisory in the
first full year of business
Assets under management over Rs.25 billion
Dividends Declared
From the above it is clears that the company gave dividend to its shareholder every year
whether in the form of interim dividend or final dividend. If we compare the dividends declared
by the company in last 3 years we find that the company gave 35% dividend in 2010 in the
form of final dividend which mean Rs.3.5 per share. In 2009 45% dividend given by the
company to its shareholders (Rs.4.5 per share) but in 2008 company gave final dividend to its
shareholders which was (Rs.4 per share.). From the above data we can also say that the
company gave dividend to its shareholders every year, more or less in comparison to the last
year’s dividend.
Dividend given by Birla sun life is not good from the shareholder’s point of view, because Rs.
4-4.5 per share, per year is a not a good dividend as the share price of Birla sun life is Rs.383.3.
COMPARISON IN DIVIDEND POLICIES OF
AMBUJA CEMENT AND BIRLA SUN LIFE
After studying the dividend policy of both BIRLA SUN LIFE AND AMBUJA CEMENT I
found that the Birla sun life pays dividend to its share holders Rs4-4.5 per share per year. On
the other hand Ambuja Cement pays Rs. 5-6 per share semi annually. If we talk about the
amount or % paid by the both companies to its share holders we find that the Ambuja Cement
pays more dividend than Birla sun life .It is because Ambuja cement pays Rs. 5-6 on a share of
Rs.112 semi annually. And Birla sun life pays a dividend of Rs. 4-4.5 on a share costing Rs
383.3 annually. There is a very huge difference in term of dividend declared by both the
companies.
Also the share price of Birla sun life is also very less than the share
price of Ambuja cement. It means the investor have to invest less amount in Birla sun life than
Ambuja Cement. Less amount of investment means less risk and less returns .
Over all if we talk about the returns from the both companies
we can say that Ambuja Cement is better than Birla sun life. But it is individual’s choice
whether they want more return from a company or less investment in a company.