CASE STUDY on

DIVIDEND DECISION POLICY Of

P R E S E N T E D B Y: A N J A L I 2 3 1 1 B M 0 1 0 0 9 2
  RIL is India's largest private sector company, and
operates world-class manufacturing facilities across

INTRODUCTION
the country.

 Reliance Industries Limited is headquartered

in Mumbai and is growing under the leadership
of Mukesh Ambani, the son of late Dhirubhai
Ambani.

 The company has ranked 106th on the Fortune

Global 500 list of the world's biggest corporations as
of 2019.

 The foundation of Reliance Group was taken by Shri

Dhirubhai Ambani in 1966 as a small textile
manufacturer unit. It was incorporated in 1973 and
conformed its name as Reliance Industries in 1985.
  The objective of the case is to have a comprehensive
analysis of the dividend policy, dividend decisions
and practices followed by RIL over the past ten years
(2001-2010) through a study of its financial results
and performance.
 The study has academic as well as practical
OBJECTIVES: significance. It would provide insight into the
practices the company has adopted related to its
dividend policy for its shareholders, and the efforts
undertaken to ensure wealth maximization of its
shareholders.
 The scope of the study is limited to the ten year
period 2002-2010 only.
WHAT IS
DIVIDEND?
 A dividend is the distribution of a
company's earnings to its
shareholders and is determined by
the company's board of directors.

 Dividends are often distributed

quarterly and may be paid out as cash
or in the form of reinvestment in
additional stock.
  For the year ending March 2024 Reliance
Industries has declared an equity dividend of
100.00% amounting to Rs 10 per share. At the
current share price of Rs 2905.10 this results in
a dividend yield of 0.34%. The company has a
good dividend track report and has
consistently declared dividends for the last 5
years
Equity Dividend (%), EPS, DPS, and Retention per Share of
RIL for the period, 2002-2010
• RIL's equity dividend payout ratio increased steadily from
47.5% in 2002 to 70.00% in 2010.
• EPS increased from 31.13 rupees in 2002 to 48.59 in
2010.DPS increased from 4.75 rupees in 2002 to 14.00
rupees in 2010.
• Retention per share increased from 26.38 rupees in 2002 to
41.39 rupees in 2010.

Share Price Movement and Dividend Declaration

Timeline of RIL for the period, 2001-2010.
RATIO ANALYSIS
Current Ratio Analysis of Reliance Industries
Ltd. RJL has fallen by -0.360%- compared to
previous Financial year. current Ratio with value
of 134 was highest in year March-2021 in last
five years. (current Ratio with value of a 625
was lowest in year mar-20 In last five years.
 Price to Book Value ratio (P/BV):
It is calculated dividing the current closing price of the
stock by the latest quarter's book value per share.
VALUATION  Price to Earnings ratio (P/E):
A valuation ratio of a company's current share price
compared to its EPS.
Price to Cash EPS (P/CEPS):
This is similar to P/E ratio; in computing this ratio cash
earning per share are used.

Enterprise Value to Cash Operating Profits

(EV/EBIDAT):
Ratio obtained dividing enterprise value (EV) by
earnings before interest depreciation, and taxes
(EBIDAT)
 FINANCIAL Key points
CONCEPTS
Understanding the mix of dept and equity financing used by reliance to fund its
Capital structure
operators and expansion.

Reliance’s capital expenditure decisions, such as investments in new projects,

Investment decision
acquisitions or research and development.

Reliance’s approach to distributing profits to shareholders through dividends,

Dividend policy
buy backs or reinvestment in the business

Compliance with accounting standards and regulations including disclosure of

Financial reporting
financial performance and position in annual report.

Strategies to manage risk associated with currency fluctuations, invest rates,

Financial basic risk management
commodity prices and other market risks.
 RIL’s consistent dividend policy fosters investor
trust and contributes to upward trends in stock
prices.
Over the study period, DPS shows a modest rise,
particularly noteworthy during 2002-2010.

FINDINGS Favorable ratios such as P/E, P/BV, P/CEPS, and

EV/EBIDAT reflect strong investor confidence in
RIL’s stock and future prospects.

 This shows investors' confidence and

has a positive impact on the market
price of RIL shares.
Thank you