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Dividend Policy of Tech Mahindra

Tech Mahindra Limited, a subsidiary of Mahindra & Mahindra Group, specializes in IT and BPO services and has undergone significant changes since its inception, including a merger with Mahindra Satyam in 2013 that positioned it as the fifth largest software service company in India. The company's dividend policy aims to balance shareholder returns with retained earnings for growth, distributing dividends based on net profit after tax while considering future investment needs. Studies highlight Tech Mahindra's focus on design thinking and its substantial revenue generation from offshore services.

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18 views3 pages

Dividend Policy of Tech Mahindra

Tech Mahindra Limited, a subsidiary of Mahindra & Mahindra Group, specializes in IT and BPO services and has undergone significant changes since its inception, including a merger with Mahindra Satyam in 2013 that positioned it as the fifth largest software service company in India. The company's dividend policy aims to balance shareholder returns with retained earnings for growth, distributing dividends based on net profit after tax while considering future investment needs. Studies highlight Tech Mahindra's focus on design thinking and its substantial revenue generation from offshore services.

Uploaded by

chakraborty.sahil1999
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Dividend Policy of Tech Mahindra

1. Introduction & Background

Tech Mahindra Limited is an ancillary of Mahindra & Mahindra Group. It


provides various services to the company which includes Information
Technology (IT) and Business Process Outsourcing (BPO) in market. It has its
headquarters at Pune and has its registered office in Mumbai.

In the year 1986, Mahindra came into a joint venture with British Telecom. In
Tech Mahindra, originally British Telecom had 30% stake in the venture (Tech
Mahindra) but in 2010 December, British Telecom sold its 5.5% stake to M&M
for Rs. 451 crore. And in 2012 British Telecom sold rest of its stake to other
institutional investors, and exited from Tech Mahindra.

On 13th April 2009 Tech Mahindra being the highest bidder with an offer of Rs
58.90 a share and acquired 31 per cent stake in the company by beating it’s one
of the strongest rival Larsen & Toubro. Venturbay Consultants Private Limited
one of the subsidiary company of Tech Mahindra was the highest bidder and
acquired a controlling stake in the company, Hon’ble Company Law Board
approved to this subject.

On March 21, 2012 with the approval of the two companies Tech Mahindra &
Mahindra Satyam board made an IT Company of worth 2.5 billion $.
Both these companies got a green flag from both Bombay Stock Exchange
(BSE) and National Stock Exchange (NSE). The High Court of Andhra Pradesh
for the merger of the two companies on June 11, 2013.

The Company would be led by Anand Mahindra as Chairman, Vineet Nayyar as


Vice Chairman and C.P. Gurnani as Chief Executive Officer (CEO) and
Managing Director (MD). By June 25, 2013 Tech Mahindra announced its
merger with Mahindra Satyam and made itself as nation’s fifth largest software
service company with the turnover of US$ 2.7 Billion.

Registrar of Companies (ROC) approved the merger on 24th June, 2013. On July
12
II. Review of Literature

In the study by Meenu Bagla, In January 2015, about 30,000+ employees were
about to be trained as stated by Vishal Sikka (Infosys) in Design Thinking. This
made the market giant Tech Mahindra curious about design thinking.

This is not a pure play: help me “Learn Design Thinking” project. We designed a
complete learning journey for Tech Mahindra which started with a two hour
session on Design Thinking with some leaders.

Within a span of 4 months, we were not just able to kick start the design thinking
journey for Mahindra but also to take it to an auto-pilot mode where they now
have internet champions training teams to apply design thinking on relevant
ongoing projects.
In another study by Akshay Khatri, Creation of new offshore services leader with
revenue of approx. $2.4 billion and work force of 75000+ with 350+ active
clients. Become 5th largest Indian IT Services Company.

Dividend Policy

The company’s dividend policy is balanced by edifying the shareholders by


giving them dividends and keeping some retained earnings for the maturation of
the company.

The yearly dividend is distributed on the Net Profit after Tax (PAT), from the
statutory financial statements as per Accounting Standards. Further, the Board of
Directors (BoD) reviews the capital expenditure needs, cash requirements for
investments in capability enhancements and future non organic growth initiatives.

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