Infosys may review its dividend policy

Infosys Technologies Ltd chief mentor, NR Narayana Murthy has hinted that the company’s board may look into the dividend policy, if the circumstances change.

“I think the board will have to obviously decide about the dividend every year. If the circumstances change, we will certainly look into it,” Murthy said on the sidelines of the company’s 26th annual general meeting.

Murthy’s reply was in response to a Mumbai shareholder seeking a review of the company’s policy, which limits dividend up to 20 per cent of the net income.
“As a growth company, as a high-tech company, we have taken a decision that we will distribute dividend up to 20 per cent of the net income in a year. So we have stuck to that,” said Murthy.

“In the USA, high-tech and growth companies don’t give anything (read dividend) because they want to plough back all that into the business. As there is a tradition of giving out dividend in India, we have decided to have a policy of 20 per cent,” Murthy pointed out.

Earlier, Murthy told the shareholders that the dividend policy dictated that the company would limit any dividend to 20 per cent of the net income generated during the year.