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How can I Get a Dividend from Stock in Zerodha? – Top Dividend Paying Stocks

How can I Get a Dividend from Stock in India? - Top Dividend Paying Stocks

Dividend from Stock

Today we will discuss How can I get dividends from stock in My Zerodha Account. We have already discussed a lot about stock investment and this time to get a dividend in our account. Before we discuss the dividend credit in our trading account, we take a close look at dividends, how does it work, and which are the top Indian companies reward their shareholders with dividends regularly.

Dividends refer to reward in the form of cash, cash equivalent, or issuing additional shares in the proportion of shareholding with investors or otherwise. In other words, Dividends are the payment a company makes to share profits with the shareholders. But to pay dividends is not obligatory on the part of the company. Therefore, it’s considered as one way to earn a return from stock investment.

To give a dividend or not, it’s a board of directors’ decision. Most importantly, it requires shareholders’ approval.

Also Read Record Date for Dividend and Bonus Shares in India | Why is Record Date after Ex-Date?

Generally, the established companies reward their shareholders with dividends after meeting their expenses and creditors’ liability. However, it’s not obligatory on company dividends on regular basis. In case a company faces a cash crunch or needs cash for reinvestment then they skip paying dividends. Once they decide the company announces when the dividend will be paid, the amount of the dividend, and the ex-dividend date. In addition, shareholders usually get a mail within a week or so with details of payout.

Usually, tech and research companies don’t pay dividends and reinvest their total profits in the business itself. This is seen generally seen with the companies having the potential to grow at a high rate or at an early stage of their venture to sustain the growth and expansion

How does Dividend Works in India?

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As discussed, the dividend is the distribution of a company’s earning over expenses. Thus, dividends are paid based on shareholding. For instance, if you own 50 shares in a company. And company announces Rs.100 per share as a cash dividend, then you’re entitled to get a cash dividend of Rs.5000 in your bank account.

Also Read What is a Rights Issue of Shares? | Rights and Bonus Issue | Example | Eligibility | Types

On the other hand, if companies declare stock dividends instead of paying in cash, then consider the same example of 50 shareholdings. Let’s say the company declares a 10% stock dividend. Keeping your ownership with the company the same, your share percentage increase by 10% which means now you will have 55 shares.

Initial Stocks = 50
Stock dividend =10%
Increase in Stockholding= 50*10/100=5 shares.
Current holding post Stock Dividend= 50+5 =55 Stock

Also Read What is Bonus Share? | Record & Ex-Bonus Date | Bonus vs Rights | Which Company will Give Bonus Share

Top Dividend Paying Stocks

In case one is looking to invest in stocks to earn regular income then it’s worth investing your time in checking Top dividend-paying stocks in India without fail over 5 years. Here the companies which are paying dividends to their shareholders and the figures mentioned are in percentages or dividend yield.

Dividend Percentage = Annual dividend per share / Current share price

Company NameIndustry20172018201920202021
Bajaj Auto2/3 Wheeler55060060012001400
GAILUtilities: Non-Elec.11290.971.356450
Hindustan ZincZINC147040010008251065
SJVNElectric Utilities27.52121.52222
ITCCigarettes, Tobacco Products47551557510151075
HERO Motorcorp2/3 Wheeler42504750435045005250
RECFinance (Including NBFCs)96.591.5110110127.1
IOCOil Company19021092.542.5120
CLARIANT CHEMChemical250501001102050
VST IndustriesCigarettes, Tobacco Products75077595010301140

Also Read Rights Issue Advantages and Disadvantages – Is Rights Issue Good or Bad?

How can I Get a Dividend on Stock via Zerodha?

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In case you’re eligible to get dividends on your stock holding then you will email confirmation from the respective company with your dividend payout details. As a result, you will get a dividend payment in your primary bank account linked to the Zerodha trading cum Demat account on the dividend payment date.

On the other hand, if a company declares a stocks dividend then the eligible number of shares gets credited into your Demat account.

Usually, the dividend payment date is 30-45 days later than the record date which you can find on NSE/BSE website.

Time needed: 2 minutes.

Here are the steps to check dividend status on your Zerodha App:

  1. Open the Zerodha Console on your device

    Here is the URL for Console: https://console.zerodha.com
    Key in your username with password followed by PIN.

  2. Go to Portfolio and Select Holding

    Once you log in, click on Portfolio Tab and choose Holding from the dropdown.


  3. Search for stock that declared Dividend

    Now scroll down a little and search for the company which has declared a dividend.

  4. Click on Option

    On selecting the stock, you will see three dots at the end of the company name as Option. After that click on Options, it will list open a dropdown. Subsequently, the first option is to view the dividend.

  5. Click on View Dividend

    Now select view dividend it will list the dividends for each year with dividend per share and total dividend amount.

  6. Reconcile with Your Primary Bank Account

    If you’re able to see the dividend as confirmed by the company on Zerodha, then do cross-check the bank statement for the credit of the dividend amount.

Hope you like the article, we tried our best to explain a difficult concept in simple language with the illustration.

FAQs

Also Read How to Invest in International Stock Market from India? | Tax Treatment

When will I Get a Dividend after the Record Date?

Usually, the dividend payment date is 30-45 days later than the record date which you can find on NSE/BSE website.

Can I Buy Shares on Ex-Dividend Date?

Yes, you can buy shares on the ex-dividend date but you’ll not be eligible for dividends. The date of purchase of the shares should be before the ex-dividend date.

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