“Concentration at the top of India’s dividend league table isn’t new, it’s been true for over a decade that a handful of high free-cash-flow, capital-light businesses (large IT services companies, PSU energy and mining majors, and a few large private banks and NBFCs) account for a disproportionate share of aggregate payouts. TCS alone has topped this table for years precisely because IT services generate cash without heavy reinvestment needs, and has a formal capital allocation policy built around returning most of its free cash flow. So, the concentration itself, in isolation, isn’t a red flag, it reflects which business models structurally throw off surplus cash,” said Kanchan.
