Banks, oil companies, mining firms and other businesses dominated by big Public Sector Undertakings (PSUs) accounted for a chunk of India’s largest dividend payouts in FY26. HDFC Bank distributed nearly ₹21,000 crore, the highest among Nifty500 companies. SBI and HCLTechnologies followed with ₹16,015 crore and ₹14,621 crore, respectively.
Yet, high absolute payouts didn’t translate into high dividend yields, showed a businessline analysis. Nearly half of the Nifty500 companies had yields below 1 per cent, while only a relatively small group of 13 companies offered yields above 5 per cent, as of September 17, 2026 based on FY26 dividends.
Banks accounted for the largest sectoral dividend payout in FY26, with 23 companies distributing ₹71,858 crore. Mining followed with ₹34,359 crore from five companies, while petroleum refineries and distributors paid ₹25,163 crore across eight companies.
“The improvement in bank asset quality, moderation in credit costs and stronger profitability, along with comfortable capital buffers, have increased banks’ ability to distribute surplus capital while continuing to support credit growth in FY26,” said Ajit Mishra, SVP-Research, Religare Broking Ltd.
Among the largest individual payers, HDFC Bank increased its FY26 dividend by 40 per cent over FY25, while SBI’s payout rose 13 per cent. Meanwhile, LIC’s dividend payout doubled during the period. In contrast, Vedanta’s dividend fell 21 per cent and HCL Technologies’ declined 10 per cent.
“HCLTech’s lower FY26 dividend appears more earnings-linked than policy-driven. FY26 PAT was at ₹17,361 crore vs ₹17,390 crore in FY25, while the company retained about 98 per cent payout,” said Kunal Bajaj, Research Analyst at Choice Institutional Equities.
For Vedanta, however, it was a deliberate policy shift, not weaker earnings, as its net profit grew 22 per cent to ₹25,096 crore in FY26. As disclosed by CFO Ajay Goel on the post-earnings call, the company’s board moved from a “requirement to pay at least 30 per cent profit as dividend” model to a framework where the board retains discretion over the quantum.
Even then, Vedanta had the highest dividend yield at 13.2 per cent as of September 17, followed by Angel One at 8.4 per cent and HPCL at 6.9 per cent.
The high-yield group is dominated by several PSUs. A high yield reflects dividends relative to the company’s stock price, so it can result from either substantial distributions or a relatively lower share price.
For the broader Nifty500, 248 companies had dividend yields below 1 per cent, with another 130 in the 1-4 per cent range, showing that the market’s substantial aggregate dividend payouts are concentrated among a limited set of companies.
“FY26 saw aggregate dividends rise to record levels, but the dividend payout ratio declined to 27.6 per cent for the broader market, from 30.4 per cent in FY25, as profits grew faster than distributions,” said Mishra.
Published on September 23, 2026
