Rushita@usadadiya

A
WINTER TRAINING REPORT

ON
“DIVIDEND ANNOUNCEMENT EFFECT ON SHARE
PRICES”
Submitted By:
USADADIYA RUSHITA K.
(17BBA0116)
Guided By:
MR.HARISH PATEL
BBA PROGRAMME
(Year 2019-20)
SHREE J D GABANI COMMERCE COLLEGE &
SHREE SWAMI ATMANAND SARASWATI COLLEGE OF

MANAGEMENT
VNSGU,SURAT
COLLAGE CERTIFICATE
This is certify that this winter training report has been prepared by
Uasdadiya Rushita (17BBA0116), under my guidance and supervision.
This project is the result of her own work and is of standard expected
from a candidate for the degree of Bachelor of Business Administration
(B.B.A).
This report submitted towerd the partial fulfillment of the requirement

for the degree of Bachelor of business Administration (B.B.A) during
acadmic year 2019-20 has been found satisfactory.
Mr.HARISH PATEL Dr. P. R. Patel

FACULTY GUIDE I/C PRINCIPLE
Date:
PLACE: SURAT
i
DECLARATION
I, hereby declare that, this winter training report submitted to Shree J. D.

Gabani commerce Collage & Shree Swami Atmanand Saraswati Collage of
Management, in the fulfillment of requirement of Bachelor of Business
Administration (BBA) degree, is result of my own work carried out during
December 2019-February 2020.
This project report is entirely an outcome of my own efforts and has not been
previously submitted to any other university or institute for any other
examination and for any other purpose by any other person.
Usadadiya Rushita
17BBA0116
Date:
Place: surat
ii
ACKNOWLDGEMENT
I express my deepest sense of gratitude, indebtedness and heartfelt thanks to

my supervisor, Mr. Harish Patel Professor, J.D Gabani Commerce College &
Shree Swami Atmanand Saraswati college of management, Veer Narmad South
Gujarat University, Surat for his resolute guidance and abiding interest
throughout my research work. His meticulous supervision paved the way for
me to attain this arduous task.
I acknowledge with thanks the co-operation extended to me by the librarians

and staff of the B.B.A. faculties. I would like to thank all those who helped me
directly or indirectly in my research work.
All my friends and well-wishers, whose names I am unable to count here,

deserve my sincere thanks for their motivation.
Rushita Usadadiya.
iii
EXECUTIVE SUMMERY
Here, The researcher has made research report on “dividend announcement

effect on share price” of companies with respect to banking sector”.
In chapter 1. The researcher has general overview about Impact of Dividend

Policy on Share Price of Companies. In this chapter included Introduction of
dividend, history of dividend.
In chapter 2. The researcher has study about banking sector. In this chapter
include definition of banking, impact of bank and computer softwear sector.
In chapter 3. The researcher has study on these 5 banks which are ICIC BANK,
YES BANK, HDFC BANK, KOTAK BANK, INDUSIND BANKand 5 computer
softwear which are TCS, INFOSYS, TECH MACHINE, WIPRO and HCL.
In chapter 4, The researcher has included Theoretical framework. In this

chapter included meaning of dividend, dividend policy variable, types of
dividend, factors affecting of dividend policy.
In chapter 5, The researcher has included literature review of this topic, what
are the researcher made before this research and what they found and
concluded in their research reports.
In chapter 6, The researcher has included research methodology in which

states the need for the research that is the problem for which research is been
made, objective of research, research design, sources of data, data collection
method, sample size and design, data analysis and the limitation for the study.
In chapter 7, The researcher has included data analysis and interpretation. In

this research I have used table and method for data analysis which shows
share price and dividend of company.
iv
TABLE OF CONTENTS
SR. TOPIC PAGE
NO. NO.
TITLE PAGE
COLLAGE CERTIFICATE I
DECLARATION II
ACKNOWLEDGEMENT III
EXECUTIVE SUMMERY IV
TABLE OF CONTENT
01 INTRODUCTION 01
02 INDUSTRY PROFIFE 11
03 COMPANY PROFILE 13
04 THEORITICAL FRAMEWORK 24
05 LITERATURE REVIEW 32
06 RESEARCH METHODOLOGY 35
07 DATA ANALYSIS 39
08 FINDINGS 55
CONCLUSION 56
BIBLIOGRAPHY 57
APPENDIX 58
CHAPTER: 1
INTRODUCTION
Introduction to the Indian stock market
A stock market, equity market or share market is the aggregation of buyers

and sellers of stocks, which represent ownership claims on businesses; these
may include securities listed on a public stock exchange as well as those only
traded privately. Examples of the latter include shares of private companies
which are sold to investors through equity crowd funding platforms. Stock
exchanges list shares of common equity as well as other security types, e.g.
corporate bonds and convertible bonds.
1.1 About SEBI:
The securities and exchange board of India(SEBI) was established in 1998 but
was only given regulatory powers on April 12, 1992, through the securities and
Exchange Board of India Act, 1992. Its plays a key role in ensuring the stability
of the financial markets in India, by attracting foreign markets in India. Its
headquarters is located at the BandraKurla Complex Business District founded
in Mumbai. It’s also has northern, eastern, southern and western regional
offices.
SEBI’s management is composed of its own members. Its management team

consists of a chairman nominated by the union Government of India, two
members who are officers from the Union Finance Ministry, one member from
the Reserve Bank of India and other five members who are also nominated by
the Union Government of India.
1.2History and Milestones of BSE:
1.2.1History of BSE:
Bombay Stock Exchange (BSE), now known as ‘BSE Limited’, is the oldest
stock exchange in the entire Asia. It is located in the PhirozeJeejeebhoy
Towers, Dalal Street in fort and has the largest number of companies of the
world listed on it. As of December 2011, the equity market capitalization of the
1
listed companies was estimated at US$1 trillion, which made it the fourteenth
largest stock exchange of the world. As per March 2012, there are more than
5,133 Indian companies listed in the stock exchange market. The BSE Sensex,
which is otherwise known as ‘BSE 30’, is the most commonly used term while
referring to the trading volume in India and Asia. When compared with NSE,
BSE has quite similar statistics in terms of share volume, NSE is almost twice
of BSE.
The history of BSE can be traced back to 1850s when a group of five stock
brokers used to conduct meetings under the banyan tree in front of Mumbai
Town Hall. As the numbers of the brokers increased, they started changing the
venue of the meeting constantly. Almost two decades later, this small group
moved to the Dalal Street in 1874, and the later, in the following year, it was
recognized as an official organization by the name ‘The Native share & stock
Brokers Association’. As per the Securities contracts Regulations Act, BSE
become the first stock exchange to be recognized by the government of India in
1956. BSE Sensex was developed in 1986 which was considered a tool to
measure the overall performance of BSE. Using this index, various equity
derivative markets were open and many future led to expansion of its trading
platform. BSE switched to electronic trading system in 1995 and took only 50
days transition. ‘BOLT’ or the ‘BSE on line trading’ is the automated version of
the trading platform, which is screen based and also currently has a capacity
of 8 million orders per day. Also, BSE is the first stock Exchange in the world
to introduce centralized internet trading system, allowing investors from all
over the world to trade on the BSE platform.
1.2.2. Milestones of BSE:
In its 140- year glorious history, BSE has crossed several milestones and been
a driver of several key initiatives and developments in the Indian capital
market.
2
From 2017
Date BSE Milestones
3rd February, BSE become India’s 1st listed stock Exchange.

2017
9th January, Hon’ble Prime Minister of India, Shri

2017 Narendra Modi inaugurated India
International Exchange(IFSC) Ltd. India’s
1st.
From 2006 to 2016
Date BSE milestones
9th June, 2016 BSE announces commencement of trading of

Sovereign Gold Bonds.
28th May, 2015 BSE exceeds 1 billion derivatives contract on

its new Deutsche Boorse T7 powered trading
platform.
22ndOctober, BSE inks strategic partnership with YES

2014 BANK.
28th November, Launch of currency Derivatives(BSE CDX)

2013
21ST First to introduce Mobile- based Trading

September,201
0
7th March, 2007 Singapore Exchange Limited entered into an

agreement to invest in a 5% stake in BSE.
3
From 1987 to 2005
Date Milestones
20th May,2005 The BSE (Corporation and Demutualization)

Scheme, 2005 (the scheme) announced by
SEBI.
21stJuly, 1997 Brokers Contingency Fund (BCF) introduced
14th BSE On-line trading (BOLT) system

introduced.
March, 1995
10thJuly, 1987 Investor’s protection Fund (IPF) introduced.
1.3. History and Milestones of NSE:

1.3.1. History of NSE:
The National Stock Exchange of India Limited (NSE) is the leading Stock
exchange of India, located in Mumbai. The NSE was established in 1992 as the
first demutualized electronic exchange in the country. NSE was the first
exchange in the country to provide a modern, fully automated screen-based
electronic trading system which offered easy trading facility to the investors
spread across the length and breadth of the country.
National Stock Exchange has a total market capitalization of more than

US$1.41 trillion, making it the world’s 12th largest stock exchange as of march
2016. Only about 4% of the Indian economy/GDP is actually derived from the
stock Exchange. The exchange was incorporated in 1992 as a tax-paying
company and was recognized as a stock exchange in 1993 under the securities
contracts (regulation) Act, 1956, when P. V. Narasimha Rao was the Prime
Minister of India and Manmohan Singh was the Finance Minister. NSE
commenced operations in the wholesale Debt Market (WDM) segment in June
1994. The capital market (equities) segment of the NSE commenced operations
in November 1994, while operations in the derivatives segment commenced in
June 2000.
4
From 2016 to 2011
Date Milestones
2016 Launched NIFTY 50 index futures trading on TAIFEX
2015 Entered into a memorandum of understanding to exchange the

level of cooperation with the London stock Exchange Group.
2014 Launched NMF-II platform for mutual funds.
2012 Launched SME-specific EMERGE platform for the listing and

trading of securities of SMEs.
2011 Commenced trading in index futures and options on global indices,

namely the S&P 500 and Dow Jones Industrial Average.
Unlike countries like the United states where nearly 70% of GDP is derived
from larger companies and the corporate sector, the corporate sector in India
accounts for only 12-14% of the national GDP (as of October 2016). Of these
only 7,800 companies are listed of which only 4000 trade on the stock
exchanges at BSE and NSE. Hence the stock trading at BSE and NSE account
for only around 4% of the Indian economy, which derives most of its income
related activity from the so-called unorganized sector and households.
1.3.2 Milestones of NSE:

From 2001 to 2010
Date Milestones
2010 Launched trading in currency Options
2009 Launched Mutual Fund Services System(MFSS)
2008 Establishment of securities lending and Borrowing

Scheme(SLBS)
2005 Launched NIFTY bank index derivatives.
2001 Launched single stock futures and options on the

listed securities
5
1.4 Trading Mechanism:
Trading at both the exchanges takes place through an open electronic limit
order book, in which order matching is done by the trading computer. There
are no market makers or specialists and the entire process is order-driven,
which means that market orders placed by investors are automatically
matched with the best limit orders. As a result, buyers and sellers remain
anonymous. The advantage of an order driven market is that it b1995rings
more transparency, by displaying all buy and sell orders in the trading system.
However, in the absence of market makers, there is no guarantee that orders
will be executed.
All orders in the trading system need to be placed through brokers, many of
which provide online trading facility to retail customers. Institutional investors
can also take advantage of the direct market access (DMA) option, in which
they use trading terminals provided by brokers for placing orders directly into
the stock market trading system.
1.5 Settlement Cycle and Trading Hours:

Equity spot markets follow a T+2 rolling settlement. This means that any trade
taking place on Monday gets settled by Wednesday. All trading on stock
exchanges takes place between 9:55 am and 3:30 pm, Indian Standard Time (+
5.5 hours GMT), Monday through Friday. Delivery of shares must be made in
dematerialized form, and each exchange has its own clearing house, which
assumes all settlement risk, by serving as a central counterparty.
1.6 Market Indexes:

The two prominent Indian market indexes are Sensex and Nifty. Sensex is the
oldest market index for equities; it includes shares of 30 firms listed on the
BSE, which represent about 45% of the index's free-float market capitalization.
It was created in 1986 and provides time series data from April 1979, onward.
6
Another index is the S&P CNX Nifty; it includes 50 shares listed on the NSE,
which represent about 62% of its free-float market capitalization. It was created
in 1996 and provides time series data from July 1990, onward.
1.7 Market Regulation:

The overall responsibility of development, regulation and supervision of the
stock market rests with the Securities & Exchange Board of India (SEBI),
which was formed in 1992 as an independent authority. Since then, SEBI has
consistently tried to lay down market rules in line with the best market
practices. It enjoys vast powers of imposing penalties on market participants,
in case of a breach.
1.8 Investors of India:
India started permitting outside investments only in the 1990s. Foreign

investments are classified into two categories: foreign direct investment (FDI)
and foreign portfolio investment (FPI). All investments, in which an investor
takes part in the day-to-day management and operations of the company, are
treated as FDI, whereas investments in shares without any control over
management and operations are treated as FPI. For making portfolio
investment in India, one should be registered either as a foreign institutional
investor (FII) or as one of the sub-accounts of one of the registered FIIs. Both
registrations are granted by the market regulator, SEBI. Foreign institutional
investors mainly consist of mutual funds, pension funds, endowments,
sovereign wealth funds, insurance companies, banks, asset management
companies etc. At present, India does not allow foreign individuals to invest
directly into its stock market. However, high-net-worth individuals (those with
a net worth of at least $US50 million) can be registered as sub-accounts of an
FII.
Foreign institutional investors and their sub accounts can invest directly into
any of the stocks listed on any of the stock exchanges. Most portfolio
investments consist of investment in securities in the primary and secondary
7
markets, including shares, debentures and warrants of companies listed or to
be listed on a recognized stock exchange in India. FIIs can also invest in
unlisted securities outside stock exchanges, subject to approval of the price by
the Reserve Bank of India. Finally, they can invest in units of mutual funds
and derivatives traded on any stock exchange.
1.9 Online and Offline Trading:
Traditionally stock trading was done through stock brokers personally or

through telephones. As number of people trading in stock market increased
enormously in last few years, some issues like location constrains, busy phone
lines, miss communication etc. started growing in stock broker offices. Then
Information technology helped stock brokers to solve those problems by Online
Stock Trading method ("Online stock brokers,”). Online stock trading is an
internet based stock trading facility where Investor can trade shares through a
website without any manual intervention from the broker. It also provides
investors with rich, interactive information in real time including market
updates, investment research and robust analysis. Advantages and
disadvantages of online trading are shown in (Table 3). Still some people like
offline stock trading where the customer calls the broker to enquire about the
stock prices. Then the broker asks some personal details to verify his identity.
After that customer can order the amount and the price at which he wants to
buy a particular stock. The broker places the order on behalf of the customer.
Similarly, the customer can also sell the shares in offline mode. And the
customer can monitor all these transactions by logging into his account. The
main advantage in offline trading is time-saving.
1.10 Demat Account and Trading Account:

Physical share certificates are converted into electronic format is known as
“Dematerialization or Demat”. Currently almost 99 percent of shares traded in
Indian stock exchanges are in demat mode. You have to open a demat account
if you want to buy or sell stocks, just like a bank account where actual money
is replaced by shares. Demat account allows you to buy, sell and transact
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shares without the endless paperwork and delays. Similarly, a trading account
works as an intermediary between the savings account and demat account.
When you want to buy shares, first the money is transferred from your savings
account to trading account. After that required amount of shares are
purchased and finally shares are stored in electronic form in the demat
account. It works just in opposite way during the time of selling shares.
1.11 Depository and Depository Participants:

A depository is an entity which holds securities of investors in electronic form
at the request of the investors through a registered Depository participant.
Currently there are two depositories in India they are:Depository provides a
safe and convenient way to hold securities and enables instant transfer of
securities. It eliminates the risk associated with physical certificates such as
bad delivery, fake securities, Delays, thefts etc. It also provides services such
as: Dematerialization, Rematerialization, transfer of securities and change of
beneficial ownership.
Depository Participant (DP) acts as intermediaries between the depository and

the investors. The relationship between the DPs and the depository is governed
by an agreement made between the two under the Depositories Act. Hence a
depository participant acts as a custodian of your securities held in
dematerialized form and carries out your instruction to transfer the same.
Currently, CDSL has 553 DPs whereas NSDL has only 293 DPs ("Depository
participant).
1.12 Sensex and Nifty:

The Sensex is basically an indicator that gives you an idea about whether most
of the stocks have gone up or have gone down. It is an indicator of all the major
companies of the Bombay Stock Exchange. BSE came out with this stock index
in the year 1986 that subsequently became the barometer of the Indian stock
market ("What are the,”). It is 20 calculated taking into consideration prices of
30 largest and most actively traded stocks of the BSE listed companies. The
9
base year of Sensex is 1978-79 and the base value is 100. Similarly, Nifty is an
indicator of all the major companies listed with National Stock Exchange. It is
calculated based on 50 major stocks listed with NSE. And the base year is
taken as 1995 and the base value is 1000.
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CHAPTER:02
INDUSTRY PROFILE
Banking sector:
The progress of banking is both the cause and result of the business growth
Today, bank is common words for the people. Every people know about the
bank. The person who have a more and they want to get interest on money
then they invest their money in the bank. If the persons require more money
then they contact with the bank.
After 1947 the Indian government also has taken a series of step of develop the
banking sector. Due to extensive efforts and considerable efforts of the
government today we have a no. of bank like as, RBI, industrial banks and Co-
operative banks.
Today in the modern world banking is a backbone of national economy of any

country. The progress of banking is an unavoidable precondition to
correspond, health and swift growth of the national economic formation.
Institutions of banking have donated much to the growth of the developed
cannot run smoothly. Banking is an important in economy as blood in the
human body.
Origin of the word “bank”:-
Opinion is not uniform with regard to the origin of the word ‘bank’ according to
some authors the word ‘bank’s derived from the words ‘bank’s’ or ‘banquet’
that is absence. The early bankers, the Jews in Italy transacted their business
on benches in the market place, when a banker failed, his ‘bench’s broken into
pieces, by the people who indicated the bankruptcy of the individual banker.
But this explanation was turned out on the ground that the Italian
moneychangers as such were never called bankers in the Middle Ages. Some
others say that word ‘bank’ original derived from the German word ‘pack’
meaning a joint stock fund, which was Italianized into ‘banco’ when the
Germans when masters of a great part of Italy. According to Professor
Ramachandra Rao, “whatever be the origin of the word bank, it would trace the
history of banking in Europe from the middle ages.”
11
According to ancient European history, the Babylonians were the earlier people
to develop a systematized banking system. It is said that temples of Babylon
were used as banks and such the temples of Ephesus and Delhi were famous
great banking institutions. The antireligious feelings, which developed
afterwards, led to the collapse of public confidence in depositing money in
temples and the priests ceased to perform the banking business. Whenever
peace and solidarity were threatened, the spread of banking also was affected
entirely. However, after the revival of civilization and with the development of
social and economic instituting, money transactions also were revived.
It was in the 12thcentury that some banks were established in Venice and
Genoa. These banks were simply relieving deposit and lending money to the
people. In fact they were not banking of the modern type.
Modern banking may be traced to money dealers on Florence who are received
money in the Florence who received money in the form of deposits and lend it
to business people. At this time, Florence was the center of money market in
Europe.
In England, money changing became an important function of bankers during

the reign of Edward III. Money changing refers to conversation of foreign coins
into British money. This function was performance by the royal exchanger on
behalf of the grown.
In another development, goldsmiths of England prepared the ground for

modern banking in England during the period of queen Elizabeth. The
goldsmiths used to receive valuables and funds of their customer’s time
become promissory notes. The seizure of a huge sum of money kept as safe
custody by the city merchants at royal mint by the government resulted in the
establishment of public banking in England. As a result of royal repudiation,
the merchants begat to entrust their cashiers with larger sums but later they
misappropriated their master’s money for their own benefit. Finding that their
employees had not treated them better than their king, the city merchants
deeded to keep their cash with the goldsmith.
Today in the modern world banking is a backbone of national economy of any

country. The progress of banking is an unavoidable precondition to
12
correspond, health and swift growth of the national economic formation.
Institutions of banking have donated much to the growth of the developed
cannot run smoothly. Banking is an important in economy as blood in the
human body.
DEFINITION OF BANKING:
“A Banking company is a company, which transects business of banking in any

state of India.”
-Section s (5) of Banking Company Act (1949)
“Banking Company is a company, which accepts money with low rate, and
investment at deposit of money with high rate.”
-Banking Regulation Act (1949)
“A bank is a financial institute and a financial intermediary that accepts

deposits and channels those deposits in to lending activities either directly or
through capital market. A bank connects customers that have capital deficits
to customers with capital surplus.”
Computer softwear:
Computer softwear& service industry includes a broad range of companies,

offering a wide range of products and services, a sampling personal computer
operating system and office productivity suites to network swcurity application
to payroll processing servicesto information technology consulting and
outsourcing services. The group’s end markets are also wide ranging, with
nearly every facet of the global economy being targeted.
Since the 1990s, computers have become a part of everyday living for many
people in the world. Most white-collar jobs, and now even many blue-collar
jobs, involve the use of a computer in some form or another. In the medical
industry, many hospitals now use handheld computers loaded with their
13
patients’ chart information. Cash registers are now computers that track the
sales of products for the store owner or manager. Very few occupations or
industries do not use a computer in some form for some function. But all of
these computers would not be useful at all if they were not programmed to do
what users needed them to. That is where the computer software industry
comes into the picture.
The field of computer software can be divided into three primary

segments: corporate information services (IS) departments, software vendors,
and consultants. Corporate IS departments usually implement and support
software and hardware products for companies that produce nontechnical
items or services. They work with the individual departments or lines of
businesses within the company and their software needs. They then fill gaps by
creating software the company needs to make it operate more efficiently, or
they reprogram and improve existing software.
Definition of computer softwear:
Computer softwear is a collection of data or computer instruction that tell the

computer how to work. This is in contrast to physical hardware, from which
the syatem is built and actually performs the work.
14
CHAPTER:03
COMPANY PROFILE
BANKING SECTOR
1.ICICI BANK
History:-
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly–owned subsidiary. ICICI's
shareholding in ICICI Bank was reduced to 46% through a public offering of
shares in India in fiscal 1998, an equity offering in the form of ADRs listed on
the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in
an all–stock amalgamation in fiscal2001, and secondary market sales by ICICI
to institutional investors in fiscal 2001 and fiscal 2002.
Vision and mission:-
Vision:
To be the leading provider of financial services in India and a major global

bank.
Mission:
We will leverage our people, technology, speed and financial capital to be the
banker of first choice for our customers by delivering high quality, world-class
products and services expand the frontiers of our business globally. Play a
proactive role in the full realization of India’s potential maintain a healthy
financial profile and diversify our earnings across businesses and geographies
maintain high standards of governance and ethics. Contribute positively to the
15
various countries and markets in which we operate. Create value for our
stakeholders.
2.YES BANK
History
Yes Bank Ltd was incorporated on November 21 2003. The bank was founded
by Rana Kapoor. The Bank obtained certificate of commencement of business
on January 21 2004. In the year 2005 they forayed into retail banking with
launch of International Gold and Silver debit card in partnership with
MasterCard International.
Vision and mission
Vision:
Building the Finest Quality Large Bank of the World in India
Mission:
To establish a high-quality, customer-centric, service-driven, private Indian

Bank catering to the ‘Future Businesses of India’
3.HDFC BANK
History:
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The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995. The Housing
Development Finance Corporation (HDFC) was amongst the first to receive an
'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in
the private sector, as part of the RBI's liberalization of the Indian Banking
Industry in 1994.
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable
network of over 1416 branches spread over 550 cities across India. All
branches are linked on an online real–time basis. Customers in over 500
locations are also serviced through Telephone Banking. The Bank also has a
network of about over 3382 networked ATMs across these cities.
Vision and mission
vision
"To become the market leader in Housing Development Finance in SriLanka"
Mission
We define our mission in the broader context of our shareholders, customers,

staff, the national economy, regulators and the natural environment.
• To our shareholders, our mission is to optimize returns.

• To our customers, our mission is to provide a caring service by
anticipating their requirements and innovatively satisfying them beyond
their expectations.
4.KOTAK BANK
17
History:
In 1985 uday kotak established what became an Indian financial services
conglomerate. In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the
group's flagship company, received a banking licence from the Reserve Bank of
India (RBI). With this, KMFL became the first non-banking finance company in
India to be converted into a bank—Kotak Mahindra Bank Limited.
Vision and mission:
Vision:
They will be a world class Indian financial services group. Their technology and
best practices will be bench-marked along international lines while our
understanding of customers will be uniquely Indian. They will be more than a
repository of their customers' savings.
5.INDUSIND BANK
History:
Is an Indian new generation bank in Pune, established in 1994.[4] The bank
offers commercial, transactional and electronic banking products and services.
IndusInd Bank was inaugurated in April 1994 by then Union Finance
Minister Manmohan Singh. Indusind Bank is the first among the new-
generation private banks in India.
Vision and mission:
Vision:
• A relevant business and banking partner to our clients

• Customer Responsive, striving at all times to collaborate with clients in
providing solutions for their banking needs
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Mission:
We will consistently add value to all our stakeholders and emerge as the ‘best-
in-class’ in the chosen parameters amongst the comity of banks, by doubling
our profits, clients and branches within the next three years.
COMPUTER SOFTWEAR SECTOR
1.TCS
History:
TCS Limited was founded in 1968 by a division of Tata Sons Limited. Its early
contracts included punched card services to TISCO (now Tata Steel), working
on an Inter-Branch Reconciliation System for the Central Bank of India. In
1975 TCS made an electronic depository and trading system called SEMCOM
for Swiss company.
Vision and Mission:
Vision:
To be amongst the 5 most admired Information Technology Solution Providers

globally with leadership focus in delivery of products, solutions and services
which are globally competitive.
Mission:
The Mission of the Human Resources Department, is to Recruit, Develop and
Retain the High-Caliber Diverse workforce
• Employee centric organization

• Well defined policies and processes
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• Premeditated induction/Orientation Programme to suit individual needs
• Long term engagement with multiple project opportunities
Diversity in verticals/domain focus – Finance, Telecom, Technology, Shipping,

Airlines, Medical….…
2.INFOSYS
History:
Infosys was established by seven engineers in Pune, Maharashtra, India with
an initial capital of $250 in 1981. It was registered as Infosys Consultants
Private Limited on 2 July 1981. In 1983, it relocated its office to Bangalore,
Karnataka, India.
Vision and Mission:
Vision:
“To be a globally respected corporation that provides best-of-breed business

solutions, leveraging technology, delivered by best-in-class people.”
Mission:
“To achieve our objectives in an environment of fairness, honesty, and courtesy

towards our clients, employees, vendors and society at large.”
20
3.TECH MACHINE
HISTORY:
The history of technology is the history of the invention of tools and techniques
and is one of the ... Several of the six classic simple machines were invented in
Mesopotamia. Mesopotamians have been ... assembly line was the first. Mass
production brought automobiles and other high-tech goods to masses of
consumers.
Vision and mission:
Vision:
Machine vision (MV) is the technology and methods used to provide imaging-
based automatic inspection and analysis for such applications as automatic
inspection, process control, and robot guidance, usually in industry. Machine
vision refers to many technologies, software and hardware products, ...
followed by communicating that data, or comparing it against target ...
Mission:
Earn the trust of our customers through technically

superior products, solutions and services;
Earn the trust of our employees through
honesty, fairness and integrity;
Earn the trust of our stakeholders through
consistently attractive financial results."
21
4.WIPRO
HISTORY:
The company was incorporated on 29 December 1945 in Amalner,
Maharashtra by Mohamed Premji as "Western India Palm Refined Oil Limited",
later abbreviated to "Wipro".
Subsidiary: Wipro Enterprises, Appirio
Industry: Information technology, Software
Vision and mission:
Vision:
Contribute for global e-society, where a wide range of information is being

exchanged beyond time and space over global networks, which breaks down
the boundaries among countries, regions and cultures, allowing individuals to
take part in various social activities in an impartial, secure way. Continous
effort to enhance people's lifestyle and quality by means of developing new

technology in wireless communication.
Mission:
The Spirit of Wipro is the core of Wipro. These are our Values. It is about who
we are. It is our character. It is reflected consistently in all our behavior. The
Spirit is deeply rooted in the unchanging essence of Wipro. But it also
embraces what we must aspire to be. It is the indivisible synthesis of the four
values. The Spirit is a beacon. It is what gives us direction and a clear sense of
purpose. It energizes us and is the touchstone for all that we do.
22
5.HCL
History:
On 11 August 1976, the company was renamed Hindustan Computers Limited
(HCL). On 12 November 1991, a company called HCL Overseas Limited was
incorporated as a provider of technology development services. It received the
certificate of commencement of business on 10 February 1992 after which it
began its operations.
Vision And Mission:
Vision:
• Conduct our business according to the highest standards of honesty and
integrity. Provide a level of service and support that allows our customers to
confidently view us as their preferred solutions provider
23
CHAPTER:04
THEORITICAL FRAMEWORK
Introduction
Dividend decision by any company is an important issue to be determined by

the financial management. The dividend policy of firm determines what
proportion of earnings is paid to shareholders by way of dividends and what
proportion is ploughed back in the firm for reinvestment purpose that is
retained earnings. Payment of dividend is desirable because the shareholders
invest in the capital of the company with a view to earn higher return and to
maximize their wealth. On the contrary, retained earnings are the sources of
internal finance for financing future requirement and expansion programmer of
the company. Thus, both growth and dividends are desirable. But they are in
conflict; a higher dividend means less provision of funds for growth and higher
retained earnings means low dividends which majority of shareholders dislike.
As both decisions are complementary to each other and no decision can be
taken independent of the other, the finance manager has to formulate a
guidable dividend policy in such a way as to strike a comparison between
dividend payment and retention.
Meaning of Dividend
The word ‘dividend’ is derived from the Latin word “Dividend” which means
“that which is to be divided”. This distribution is made out of the profits
remained after deducting all expenses, providing for taxation, and transferring
reasonable amount to reserve from the total income of the company. The term
dividend refers to that part of the profits of a company, which is to be
distributed amongst its shareholders. It may, therefore, be defined as the
return that shareholders get from the company, out of its profits, on his
shareholdings. According to the Institute of Chartered Accountants of India,
dividend is, “a distribution to shareholders out profits or reserves available for
this purpose.(2A company cannot declare dividend unless there is – - Sufficient
profits - Board of Directors recommendation - An acceptance of the
24
shareholders in the annual general meeting. Thus, the Board of Directors
keeping in view the financial requirements of the company and the quantum of
reasonable return to shareholders decides how much dividend should be
distributed. It is declared in annual general meeting of the company and after
approval it is known as ‘declared dividend’
Types of Dividends:
Dividends can be classified into different categories depending upon the form
in which they are paid. The various forms of dividend are as under:
1) Cash Dividend
2) Stock Dividend or Bonus Issue
3) Bond Dividend
4) Scrip Dividend or Promissory Note
5) Property Dividend
1) Cash Dividend:
The usual practice is to pay dividends in cash. Payment of dividend in cash

results in outflow of funds from the firm. The firm should, therefore, have
adequate cash resources at its disposal or provide for such resources so that
its liquidity position is not adversely affected on account of distribution of
dividends in cash. Generally, shareholders are interested in cash dividend and
according to sec. 205(3) of the Companies Act also dividend is payable in cash
only.
2) Stock Dividend:
Stock dividend is next to cash dividend in respect of its popularity. Payment

stock dividend is popularly termed as “issue of bonus shares” in India. Issue of
bonus shares results in conversion of company’s profit into share capital.
Bonus shares are therefore, shares allotted by capitalization of reserves or
surplus of a corporate enterprise. Such shares are issued to the equity
25
shareholders in proportion to their holdings of the equity share capital of the
company. When the company pays stock dividend, there is no change in the
company’s assets or liabilities or in total market value of the company’s share.
A shareholders does not gain or loss as a result of new shares, because he
retain the same old proportion of total share capital.
However, in India issue of stock dividend is not permitted. Dividend has to be

paid in cash. According to SEBI’s guidelines on issue of bonus shares, bonus
shares cannot be issued in lieu of can issue bonus shares frequently in
addition to cash dividend. (Infosys, Wipro, TCS, etc.,)
3) Scrip Dividend:
It is the dividend given in the form of promissory notes to pay the amount at a
specific future date. The promissory note is known as scrip’s or dividend
certificates. When a company is a regular dividend paying company but
temporarily its cash position is affected due to locking up of funds, which is
likely to be released shortly, this opinion is preferred. Scrip may or may not be
interest bearing.
4) Bond Dividend:
In case the company does not have sufficient funds to pay dividend in cash it
may issue bonds for the amount due to the shareholders by way of dividends.
It has longer maturity date than Scrip dividend. It always carries interest.
Thus, bondholders get regular interest on their bonds besides payment of bond
money on the due date. But this practice is not seen in India nor legally
allowed.
5) Property Dividend:
In case of such dividend the company pays dividend in the form of assets other
than cash. This may be in form of company’s products. This type of dividend is
not popular in India.
26
Dividend Policy
Meaning of dividend policy

The term dividend policy refers to the policy concerning quantum of profits to
be distributed as dividend. The concept of dividend policy implies that
companies through their Board of Directors evolve a pattern of dividend
payments, which has a bearing on future action.
As per Weston and Brigham, “Dividend policy determines the division of

earnings between payments to shareholders and retained earning”.
Gitman, “The firm’s dividend policy represents a plan of action to be followed

whenever the dividend decision must be made.
Factors affecting Dividend Policy:

It is a generally accepted principle that the directors of a company have sole
right to declare dividend and determine its amount out of company’s earnings.
But, in addition to legal restrictions, they have to consider following factors
while deciding the dividend policy:
1) Preference of Shareholders:
The preference of shareholders may influence the dividend policy of the firm.
Dividend income provides investors a regular income and builds confidence
amongst the investors of the company. However, there are certain
shareholders, especially from high tax brackets, like to get the benefit of capital
gains in the form of appreciation in the value of share. In such a case, the
policy should try to satisfy the dominating group of shareholders.
2) Current Year's Earnings:
Earnings of a company fix the upper limit of dividends. A company has to

determine the amount of dividend keeping in view the actual earnings of the
current year only. Of course, the whole of earnings is not to be distributed by
the company, but it is the base of dividend policy.
27
3) Past Dividends:
Shareholders do expect that the company would pay not less than dividend
pain in the past. Of course, if conditions change, departure has to be made
from the past trend of dividends. But generally directors are hesitant to reduce
the previous year’s dividend rate, and if needed, they would maintain the rate
by withdrawing from accumulated profits.
4) Management Control Motive:
The existing shareholders or management’s control motive also influences the

dividend policy of a company. If the management wants that the existing
shareholders should continue to retain control over the company it would not
be wise to raise finance through issues of new shares, for that control is diluted
into the hands of new shareholders. Therefore, the firm may rely more on
retained earnings. It is likely to have a lesser dividend payout policy.
5) Liquidity Position:
Dividends entail cash payments. Hence, the liquidity position of the firm has a
bearing on its dividend decisions. A firm may have earned handsome profits,
but may not have enough cash to pay dividend. This is typically the case of
new establishments or highly profitable but rapidly expanding firms, which,
thanks to their substantial investment and other commitments do not have
adequate liquidity.
Types of Dividend Policies:

The dividend policy should be determined by taking into consideration the
above stated factors. A financial manager can recommend any one of the
following dividend policies:
1) Stable Dividend Policy:
Stability of dividend means similarity or no change in dividend payments over

the years. In other words, when a company pays dividend at a fixed rate and
28
follows it for future years to come regardless of fluctuations in the level of
earnings, it is said to be a stable dividend policy. Thus, stability of dividends
refers to regular payment of dividend at a fixed rate. Stable dividend policy
increases credibility of the management in the market and shareholders also
prefer such stock giving minimum return at regular interval leads to increase
in market price of shares. Those companies whose earnings are stable follow
this policy. The stability of dividend is described in two different ways viz. (a)
constant/fixed dividend per share (b) constant payout ratio.
(a) Constant amount per share:
In this policy, company pays fixed amount of dividend per share regularly –
every year irrespective about the earnings of the company. But it does not
mean that management has static nature and will adopt the policy for years to
come. If the company’s levels of earnings are increased gradually and same
level is to be maintained in the future then the dividend per share is been
increased respectively. This policy puts equity shares at par with preference
shares which yields fixed dividend per share every year. The fact that equity
shareholders bear the total risk of the business is forgotten here. Generally,
this policy is preferred by those persons and institutions that depend upon the
dividend income to meet their living and operating expenses.
(b) Constant payout ratio:
In this policy, a fixed percentage of net earnings are paid as dividend every
year, that is, constant payout ratio. For example, a company adopts a 60 per
cent payout, that is, 60 per cent of net earnings of the company will be paid as
dividend and 40 per cent of net earnings will be transferred to reserves. No
dividend is paid in the year of loss. Companies generally, prefer this policy
because it reflects the ability of the company to pay dividends. But it is not
preferred by shareholders as the return fluctuates with the amount of
earnings.
29
2) Policy of No Immediate Dividend:
Generally, management follows a policy of paying no immediate dividend in the

beginning of its life, as it requires funds for growth and expansion or they may
be experiencing serious financial difficulties and may be unable to pay
dividend. In this case, the firm can minimize adverse effects on the stock price
by carefully explaining the reason for the elimination of the dividend. After the,
no dividend policy, it is advisable that the company should either issue bonus
shares from its reserves or company’s shares should be split into shares of
small amount so that later on rate of dividend is maintained at a reasonable
rate.
3) Policy of Irregular Dividend:
When the firm does not payout fixed dividend regularly, it is irregular dividend
policy. It changes from year to year according to change in earnings level. This
policy is based on the management belief that dividends should be paid only
when the earnings and liquid position of the firm warrant it. Firms having
unstable earnings, particularly engaged in luxury goods, follow this policy.
4) Policy of Regular Dividend plus Extra Dividend:
This policy would be appropriate for a firm with cyclical earnings and limited
opportunities for growth. In a good earnings year, the firm would declare an
extra dividend. The designation ‘extra’ is used in connection with the payment
to tell the shareholders that this is extra and which might not be continued in
future. When the earnings of the company have permanently increased, the
extra dividend should be merged with regular normal dividend and thus, rate
of normal dividend should be raised.
5) Policy of Regular Dividend plus Stock Dividend:
In this policy company pays stock dividend in addition to the regular dividend
the dividend is split into two parts. This policy is adopted when the company
30
has earn edh and some profit and wants to give shareholders a share in the
additional profit but wants to retain cash for expansion. It is not advisable to
follow this policy for a long time, as the number of shares increases and the
earning per shares reduces, which led to decrease in share price.
31
CHAPTER:05
LITERATURE REVIEW
1) Dr. Debasish Sur, “Dividend payout trends in the post liberalization era: A
Case Study of Colgate Palmolive (I) Ltd.” Management Accountant, March
2005, attempted to assess the dividend policy of the company with particular
reference to its vital measures – dividend per share and dividend payout ratio
and three factors influencing dividend policy earning per share, capital
employed and quick ratio.
2) Singhania Monica, “Trends in Dividend Payout – A Study of Selected Indian

Companies”, Journal of Management Research, Vol. 5, No. 3, Dec. 2005.
Monica Singhania concluded that the sample companies declared dividend are
declined from 448 companies in 1992 to 376 companies in 2004. However, the
average dividend payout ratio increased significantly from about 25% - 68%
during 1992-2004.
3) Subba Reddy Y. “Dividend Policy of Indian Corporate Firms; an Analysis of

Trends and Determinants”, NSE Research Initiative, Dec. 2002, Serial No. 19.
Subba Reddy examined the dividend trends in India for a large sample of
stocks traded on NSE and BSE and found that the percentage of companies
paying dividends has declined from 60.5% in 1990 to 32.1% in 2001 and that
only a few companies have consistently paid the same levels of dividends.
4) James Walter, “Dividend Policy: It’s Influence on the Value of the Firm,”
Journal of Finance, May 1963. According to Walter, dividend payout ratio do
affect the share prices - (1) when the rate of return on investments exceeds the
cost of capital, the price per share increases as the dividend payout ratio
decreases, (2) when the rate of return on investment is equal to the cost of
capital, the price per share does not changes in dividend payout ratio, (3) when
the rate of return on investments is less than the cost of capital, the price per
share increase.
32
5) Myron J. Gordon, “The Investment, Financing and Valuation of the
Corporation, Homewood, III, Richard Irwin, 1962. Gordon leads to conclusions,
which are similar to that of the Walter’s. Moreover, Gordon’s model contends
that dividend policy of the firm is relevant and the investors put a positive
premium on current incomes/dividends. He argues that dividend policy affects
the value of shares even in a situation in which the return on investment of a
firm is equal to the required rate (r = ke). es as the dividend payout ratio
increases.
6) M. H. Miller and F. Modigliani, “Dividend Policy, Growth and the Valuation

of Shares,” Journal of Business, vol. 34, October 1961. Miller and Modigliani
have advanced the view that the value of firm depends solely on its earnings
power and is not influenced by the manner in which its earnings are split
between dividends and retained earnings. The view is referred to as the
‘dividend irrelevance theorem’.
7) John F. Muth, “Rational Expectations and the Theory of Price Movements”

1961. In a world of rational expectations, unexpected dividend announcements
would transmit messages about changes in earnings potential, which were not
incorporated in the market price earlier. The re-appraisal that occurs as a
result of these signals leads to price movements, which took like responses to
the dividends themselves, though they are actually caused by an underlying
revision of the estimate of earnings potential.
8) B. Graham and D.L. Dodd, Analysis: Principles and Techniques”, 3rd ed.,
New York, “Security Mc Grew Hill Book Company, 1951. According to Graham
and Dodd, the stock market places considerably more weight on dividends
than on retained earnings.
9) Merton H. Miller, “Do Dividends Really Matter?” Selected Paper No. 57,
Graduate School of Business, The University of Chicago. Miller said: “Both
33
views are correct in their own ways. The academic is thinking of the expected
dividend; the practitioner of the unexpected.” Miller conveys us that the
practitioners’ view that dividends matter very much and the academic view that
dividends do not matter.
34
CHAPTER:06
RESEARCH METHODOLOGY
6.1 Title of the Project:
“A Study on Impact of Dividend on Share Prices of Indian Companies”
6.2 Scope of Study:

• Few parameters in relation to the share prices have been selected by the
researcher like before and after closing share prices on the basis of short term
and long term.
• Short term refers as 15 days, 30 days and 3 months whereas, long term
refers to 6 months and year comparison, to the review the change in share
prices of selected sample units of the selected companies.
• Researcher has selected 2 sector such as Computer sector, Private bank

sector, Auto sector.
• From each selected sector researcher has selected top five companies paying
dividend is selected.
6.3 Significant of Study:

The significance of the present study being made can be listed below:
1) The study would be useful for the financial managers of the companies in
formulating their dividend policy. The financial managers have to decide how
much will be the dividend payout ratio and how much will be the retention
ratio out of the earning per share; they should take such a decision which
would maximize investor’s wealth.
2) The study would also be useful for the investor’s also. The investors should
invest in companies, which difference pays dividends. As investors prefer
“certain few small dividends in place of uncertain huge capital appreciation.”
6.4 Objectives of Study:

The broader objectives of the study are as under:
35
Primary objective:
1)To know the effect of dividend decision on share price.
Secondary objective:
2) To know the relevant changes in share prices after declaring dividends are
similar in all companies or not.
6.5 Types of Data:

Researcher has used Secondary data for the study in research: For the
secondary data various literatures, books, journals, magazines, web links are
used for the research.
6.6 Sources of Study:

The study based on secondary data and annual report of each company.
www.moneyconrol.com
www.bse.com
6.7 Research Design:

Researcher has select descriptive research design, the data is of descriptive
characteristic and hence appropriate statistical test is applied to collected data
for accepting or rejecting the null hypothesis.
6.8 Sampling Method:

Company are selected on the basis of sample convenient non probability
Sampling Method because sample are selected on convenient available as daily
share prices companies declared dividend which affect the share prices or not.
36
6.9 Population:
The universe of the study consists of all the Indian companies paying regular
dividend.
6.10 Sample Size:

As the study is to be carried out by the individual researcher, it is not feasible
to select all the companies paying dividend as the sample units for the study.
So, the researcher has adopted multistage sampling. As such the universe of
the study is Indian companies paying regular dividend is too many and
scattered.
(I) the researcher has first prepared the list of different sectors operating in
India.
(ii) The researcher selected randomly 2 different sectors of India.
(iii) The researcher listed out top five companies (paying regular dividend) in
the selected sectors.
(iv) The researcher has collected the data from BSE.
(v) The data are collected on the basis of short term and long term basis.
The collected data was suitably classified and tabulated in the form of simple
tables and the data was objectively analyzed and conclusions were drawn on
the basis of parametric tests at 5% level of significance with the help of
statistical technique like t-test.
6.11 Hypothesis:
H0 = There is no significant mean difference between before and after dividend
declaration in share prices.
H1 =There is a significant mean difference between before and after dividend

declared declaration in share prices.
37
6.12 Tools & Techniques for Data Analysis:
Paired t-test:
Paired t-test is a way to test for comparing two related samples, involving small
values of n that does not require the variances of the two populations to be
equal, but the assumption that the two populations are normal must continue
to apply. Such a test is generally considered appropriate in a before and after
treatment study.
6.13 Limitation of research:

1) As, the study is conducted on micro level with the samples of 2 Sectors, the
generalization of results cannot not be made to whole Indian corporate world.
2) The study is limited to the dividend announcement during 2019 period.
3) Researcher has applied test on short term and long term so the daily
analysis is not done.
4) The study is limited to 10 companies as sample.
38
CHAPTER:07
DATA ANALYSIS
BANKING INDUSTRY-PRIVATE SECTOR
Banking in India has its origin as early as the Vedic period. It is believed that
the transition from money lending to banking must have occurred even before
Manu, the great Hindu Jurist, who has devoted a section of his work to
deposits and advances and laid down rules relating to rates of interest. During
the days of the East India Company, it was the turn of the agency houses to
carry on the banking business. The General Bank of India was the first Joint
Stock Bank to be established in the year 1786 (till 1906). In the first half of the
19th century the East India Company established three banks; the Bank of
Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Madras in 1843.
These three banks also known as Presidency Banks were independent units
and functioned well. These three banks were amalgamated in 1920 and a new
bank, the Imperial Bank of India was established on 27th January 1921. With
the passing of the State Bank of India Act in 1955 the undertaking of the
Imperial Bank of India was taken over by the newly constituted State Bank of
India.
The Reserve Bank which is the Central Bank was created in 1935 by passing
Reserve Bank of India Act 1934. In the wake of the Swadeshi Movement, a
number of banks with Indian management were established in the country. On
July 19, 1969, 14 major banks of the country were nationalized; this in turn
resulted in a significant growth in the geographical coverage of banks. Every
bank had to earmark a minimum percentage of their loan portfolio to sectors
identified as “priority sectors”. The manufacturing sector also grew during the
1970s in protected environs and the banking sector was a critical source.
Moreover on 15th April 1980 six more commercial private sector banks were
also taken over by the government (i.e. nationalized). Since then the number of
scheduled commercial banks increased four-fold and the number of bank
branches increased eight-fold.
After the second phase of financial sector reforms and liberalization of the
sector in the early nineties, the Public Sector Banks (PSB) s found it extremely
difficult to compete with the new private sector banks and the foreign banks.
39
These banks due to their late start have access to state-of-the-art technology,
which in turn helps them to save on manpower costs and provide better
services. The economic reforms undertaken in the last 15 years have brought
about a considerable improvement in the health of banks and financial
institutions in India. The banking sector is a very important sector of the
Indian economy. The sector has made a marked improvement in the
liberalization period. There has been extraordinary progress in the financial
health of the commercial banks with respect to capital adequacy, profitability,
asset’s quality and risk management. Deregulation has opened new doors for
banks to increase revenues by entering into investment banking, insurance,
credit cards, depository services, mortgage, securitization, etc.
The limit for foreign direct investment in private banks has been increased
from 49% to 74%. In addition, the limit for foreign institutional investment in
private banks is 49%. Liberalization and globalization have created a more
challenging environment in the banking sector. Now the challenges faced by
the sector would be gaining profitability, reinforcing technology, maintaining
global standards, corporate governance, sharpening skills, risk management
and, the most important of all, to establish 'Customer Intimacy'.
The banking sector is the most dominant sector of the financial system in
India, and with good valuations and increasing profits, the sector has been
among the top performers in the markets. According to a FICCI survey, the
chief strong point of the Indian banking industry is the regulatory system,
which has enabled India to carve a place for itself in the global banking scene.
The regulatory systems of Indian banks are rated above China and Russia; and
at par with Japan and Singapore.
Currently, India has scheduled commercial banks (SCBs) 29 private banks

(these do not have government stake; they may be publicly listed and traded on
stock exchanges). Of which the list of top five dividend paying banks is as
under
40
DIVIDEND PAYOUT BY THE PRIVATE SECTOR BANK
SR COMPANY DIVIDEND DIVIDEND (%)

NO ANNOUNCEMENT
1. ICICI 4/05/2019 75%
2. YES 24/04/2019 135%
3. HDFC 24/04/2019 750%
4. KOTAK 2/05/2019 14%
5. INDUSIND 24/04/2019 75%
Dividend Payout – Private Sector Banks
The top five dividend paying companies include private banks. The highest
dividend paying bank is Housing Development Finance Corporation (HDFC)
with 750% and the lowest of the top the five is
KOTAK BANK with 14%.
2 COMPUER SOFTWARE (THE IT’S):-
The information technology industry has truly transformed the way the world
looks at India. Rapidly capturing global imagination, the success of its IT
industry has placed India at the forefront of the emerging global knowledge
economy.
India's IT growth in the world is primarily dominated by IT software and

services such as IT Consulting, Application Management, Infrastructure
Management Services, Software testing, Service-oriented architecture and Web
services.
The services segment, comprising IT services, product engineering and

business process outsourcing (that accounted for over 50% of the expenditure)
41
reported especially healthy growth, with the hardware and software segments
reporting modest growth. With a steady recovery in the growth rate of the
global economy, the outlook for corporate spending on IT and business services
is positive, with the growth being led by IT-ITES services (especially
outsourcing). The growth in global expenditure on IT hardware and software is
likely to be modest in the medium term.
Increasing corporate budgets for IT and business services globally augur well
for the Indian IT-ITES industry, which expects services exports to be the key
growth drivers. Various factors that have enabled India to emerge as a
preferred destination for outsourcing of ITES include cost competitiveness,
quality, customer services, time-to-market, reliability and security (which
include data protection, respect for intellectual property rights and network
security). In addition, its services range has expanded, as evident from the
emergence of new services area, including KPO, remote infrastructure
management, product engineering services and R&D services.
India's most prized resource is its readily available technical work force. India
has the second largest English-speaking scientific professionals in the world,
second only to the US. It is estimated that India has over 4 million technical
workers, over 1,832 educational institutions and polytechnics, which train
more than 67,785 computer software professionals every year. The enormous
base of skilled manpower is a major draw for global customers. According to a
Gartner study, India remains the undisputed leader in offshore services and
tops the list of 30 countries on criteria's such as language, government
support, labor pool, infrastructure, educational system, cost, political and
economic environment, cultural compatibility, global and legal maturity, and
data and intellectual property, security and privacy.
Although India has established itself as a preferred destination for outsourcing,

it is increasingly facing emerging competition. Nevertheless, a relatively small
portion of the global market for offshore contracts has been captured till date
and there exists significant scope for growth. While the Indian IT-ITES industry
has the potential to capitalize on the opportunities, it needs to address areas
such as poor infrastructure, a dearth of talent, and the need to developed
skilled human resources.
42
In the face of these problems, individual firms, while these are registering
healthy profit margins in the short to medium term, may opt to offshore
operations to nations that offer better cost-effective structures and
productivity. In the recent years some Indian players have announced overseas
acquisitions, and alliances and partnerships with global firms. Twenty-nine
India-based companies including Tata Consultancy Services, HCL
Technologies, Genpact, and WNS Global Services amongst others have been
listed among the best 100 IT service providers in a new survey carried out with
a view to assist business heads of major outsourcers identify reliable,
innovative and tech-savvy partners.
There are many companies engaged in Computer Software business of which

hundreds are being recognized and listed on the stock exchanges. Of which the
highest average dividend paying companies for the purpose of our study are:
Dividend Payout – Computer Software
DIVIDEND PAYOUT BY THE COMPUTER SOFTWARE
SR COMPANY DIVIDEND DIVIDEND (%)

NO. ANNOUNCEMENT
1. TCS 30/5/2019 500%
2. INFOSYS 31/5/2019 210%
3. TECH MACHINE 18/7/2019 80%
4. WIPRO 9/2/2019 50%
5. HCL 31/5/2019 100%
The table shows the top three highest dividend paying engineering companies
during the period 2018-19. TCS has paid an outstanding overall dividend of
500%.second place is the INFOSYS dividend of 210%.
43
Data analysis and Data Interpretation
Analysis of share prices before and after declaring dividend:
To measure the impact of dividend on the share prices of the unit’s researcher
has calculated the Short term basis (15 days, Monthly & 3 Months) of share
prices before and after declaring dividends. As per the long term basis is for 6
months and yearly basis of share prices before and after declaring the
dividend.
Analysis of data with the help of t-test:
This test is used when the samples are dependent; that is when there is only
one sample that has been tested twice (repeated measure) or when there are
two samples that have been matched or “paired”. To know the impact of
dividend on various variable Paired “t-test” is applied. As such a test is
generally considered appropriate in before and after treatment study. Here data
of various variables before and after declaring dividend is been collected and
tabulated in such a manner that proper calculations can be made and “t-test”
can be applied.
The hypothesis is as under:
Hypothesis:


44
BANKING SECTOR ANALYSIS
Paired t-test of share’s prices before and after declaring dividend on long
Term.


BANKING SECTOR –ICICI COMPANY
Variable 1 Variable 2 change

Mean 21430 21795.75 -523.95
Variance 918404082 949891491 -31487409
Observations 2 2
Pearson Correlation 1
Hypothesized Mean 0
Difference
Df 1
t Stat -1.00411805
P(T<=t) one-tail 0.24934594
t Critical one-tail 6.313751515
P(T<=t) two-tail 0.498691879
t Critical two-tail 12.70620474
Table 7.1Paired Sample Test On Long Term Basis of ICICI BANK
The above table number 7.1 shows the long term share prices of ICICI
Companies of before and after prices after declaring dividend. It is clearly seen
from the table that there is no much differences in share prices, which reveals
that dividends do not affect share prices. Moreover, by applying, t-test the
following result was obtained.
Interpretation of 1 year:P value is(0.00) < 0.05. Hence, the H0 is rejected that
means significant mean difference in before and after dividend declaration in
share prices within sample of ICICI Company share during 1 year peri
45
Term.


BANKING SECTOR – YES COMPANY
Variable 1 Variable 2 Change

Mean 21425.5 21796.5 -371
Variance 917932704.5 949128880.5 -31195
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -1.02770083
P(T<=t) one-tail 0.245651775
P(T<=t) two-tail 0.49130355
Table 7.2Paired Sample Test On Long Term Basis of YES BANK
The above table number 7.2 Shows the long term share prices of YES
Interpretation of 1 year:
P value is (0.00) < 0.05. Hence, the H0 is rejected that means significant mean
difference in before and after dividend declaration in share prices within
sample of YES Company share during 1 year period.
46
Term.


BANKING SECTOR – HDFC COMPANY

Mean 21431 21791 -360
Variance 917461448 949259592 -31798144
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -0.9782609
P(T<=t) one-tail 0.25349777
P(T<=t) two-tail 0.50699554
Table 7.3Paired Sample Test on Long Term Basis of HDFC BANK
The above table number 7.3 Shows the long term share prices of HDFC
sample of HDFC Company share during 1 year period.
47
Term.


BANKING SECTOR – KOTAK COMPANY

Mean 21428.8 21768.5 -339.7
Variance 918335510.5 947299864.5 -28964354
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -1.01312258
P(T<=t) one-tail 0.24792512
P(T<=t) two-tail 0.495850241
Table 7.4Paired Sample Test on Long Term Basis of KOTAK BANK
The above table number 7.4 Shows the long term share prices of KOTAK
sample of KOTAK Company share during 1 year period.
48
Term.


BANKING SECTOR – INDUSIND COMPANY

Mean 21427.5 21807.25 -379.75
Variance 917761324.5 950458200.1 -32696875.6
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -1.00396563
P(T<=t) one-tail 0.2493701
P(T<=t) two-tail 0.4987402
Table 7.5Paired Sample Test on Long Term Basis of INDUSIND BANK
The above table number 7.5 Shows the long term share prices of INDUSIND
sample of INDUSIND Company share during 1 year period.
49
7.2 COMPUTER SECTOR ANALYSIS
Term.


COMPUTER SOFTWARE– TCS

Mean 21734.5 21922.5 -188
Variance 944429260.5 960753612.5 848353648
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -1.00534759
P(T<=t) one-tail 0.249151176
P(T<=t) two-tail 0.498302351
Table 7.6Paired Sample Test on Long Term Basis of TCS
The above table number 7.6 Shows the long term share prices of TCS
Interpretation of 1 year: P value is (0.00) < 0.05. Hence, the H0 is

rejected that means significant mean difference in before and after dividend
declaration in share prices within sample of TCS Company share during 1 year
period.
50
Term.


COMPUTER SOFTWARE- INFOSYS COMPANY

Mean 21698 21878.5 -180.5
Variance 940998962 956637540.5 -15638578.5
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -1.005571031
P(T<=t) one-tail 0.249115808
P(T<=t) two-tail 0.498231616
Table 7.7Paired Sample Test on Long Term Basis of INFOSYS
The above table number 7.7 Shows the long term share prices of INFOSYS
sample of INFOYS Company share during 1 year period.
51
Term.


COMPUTER SOFTWARE– TECH MACHINE COMPANY

Mean 21698 21789.75 -91.75
Variance 940998962 948671461.1 -7672499.1
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -1.03966006
P(T<=t) one-tail 0.243811421
P(T<=t) two-tail 0.487622842
Table 7.8Paired Sample Test on Long Term Basis of TECH MACHINE
The above table number 7.8 Shows the long term share prices of TECH
MACHINE Companies of before and after prices after declaring dividend. It is
clearly seen from the table that there is no much differences in share prices,
which reveals that dividends do not affect share prices. Moreover, by applying,
t-test the following result was obtained.
sample of INFOSYS Company share during 1 year period.
52
Term.


COMPUTER SOFTWARE– WIPRO COMPANY

Mean 21556 21922.5 -366.5
Variance 929236050 961104324.5 -31868274.5
Observations 2 2
Hypothesized Mean 0
Difference
Df 1
t Stat -1
P(T<=t) one-tail 0.25
P(T<=t) two-tail 0.5
7.9Paired Sample Test on Long Term Basis of WIPRO
The above table number 7.9 Shows the long term share prices Table of WIPRO
sample of WIPRO Company share during 1 year period.
53
Term.


COMPUTER SOFTWARE– HCL COMPANY

Mean 21836 21910.5 -74.5
Variance 953447112 959964744.5 -6517632
Observations 2 2
Hypothesized Mean 0
Difference
df 1
t Stat -1
P(T<=t) one-tail 0.25
P(T<=t) two-tail 0.5
Table 7.10Paired Sample Test on Long Term Basis of HCL
The above table number 7.10 Shows the long term share prices of HCL
sample of HCL Company share during 1 year period.
54
CHAPTER:08
FINDING
The researcher provides the following finding by five banks such as ICICI bank,
YES bank, HDFC bank, KOTAK bank, INDUSIND bank and five computer
software companies such as TCS, INFOSYS, TECH MACHINE, WIPRO and
HCL.
This study show that before declaration of dividend on share price of ICICI
bank was 21795.75 then after increase up to RS. 21795.75
This study show that before declaration of dividend on share price of YES bank
was 21425.5 then after increase up to RS. 21796.5
This study show that before declaration of dividend on share price of HDFC
bank was 21431 then after increase up to RS. 21791
This study show that before declaration of dividend on share price of KOTAK
bank was 21428.8 then after increase up to RS. 21768.5
This study show that before declaration of dividend on share price of

INDUSIND bank was 21427.5 then after increase up to RS.21807.25
This study show that before declaration of dividend on share price of TCS
company was 21734.5 then after increase up to Rs.21922.5
This study show that before declaration of dividend on share price of INFOSYS
company was 21698 then after increase up to Rs.21878.5
This study show that before declaration of dividend on share price TECH
MACHINE company was 21698 then after increase up to Rs.21789.75
This study show that before declaration of dividend on share price of WIPRO
This study show that before declaration of dividend on share price of HCL
55
Conclusion
The dividend declaration affect almost in every sectors like Banking sector,
Computer sector. There are some exception in this case as per findings based
on T-test. Some companies are not affected in certain period as mentioned in
findings only. This concludes that prices of shares of companies are affected
with dividend announcements. The variation in the variables within the sample
units might be due to differences in the- face value of shares, asset holding,
and capital structure, the market presence, product market holding of the
company, the asset values, the research and development of the companies,
promotion, brand value, human capital, government rules and schemes for
control and development etc. In short, dividends affect the value of the firm i.e.
it affects the financial condition of the company as dividend is to be paid out in
cash results in cash outflow but, there is significant relation of share price
changes with the dividend policy as the might be facing liquidity crunch, or
having some other fruitful investment opportunities on hand which gets
affected with dividend announcement.
56
BIBLIOGRAPHY
BOOKS:
• Rana T. J. “Advance Finance Management’’ B. S. Shah
Publication, Ahmedabad, 2003
• Van Horne J. C. “Financial Management And Policy” Prentice Hall of
PVT. Ltd. New Delhi, 2000
• Banerjee S. K. “Financial Management”, S. Chand & Co. Ltd.
New Delhi, 2004
• Agarwal M. R. “Financial Management”, RBSA Publisher, Jaipur,
1st ed. 2003
Journals and Newspapers:
The Capital Market
The Times of India
Economic Times
Websites:
www.moneycontrol.com
www.bseindia.com
www.nseindia.com
www.wikipedia.org
www.yahoofinance.com
57
APPENDIX
BANK
ICICI dividend rs.
04-05-2017 1
04-05-2019 2.5
YES
24-04-2017 2
26-04-2019 12
HDFC
24-04-2017 13
22-04-2019 5
KOTAk
02-05-2017 0.6
08-03-2019 5
INDUSIND
24-04-2017 6
22-05-2019 7.5
58
COMPUTER SOFTWEAR COMPANY
TCS Dividend rs.
31-12-2018 4
10-01-2020 5
INFOSYS
16-10-2018 7
11-10-2019 8
TECH
16-10-2018 7
14-04-2019 10.5
WIPRO
11-01-2018 1
14-01-2020 1
HCL
24-07-2019 2
20-12-2019 2
59

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A

WINTER TRAINING REPORT

SHREE J D GABANI COMMERCE COLLEGE &

SHREE SWAMI ATMANAND SARASWATI COLLEGE OF

This report submitted towerd the partial fulfillment of the requirement

Mr.HARISH PATEL Dr. P. R. Patel

I, hereby declare that, this winter training report submitted to Shree J. D.

I express my deepest sense of gratitude, indebtedness and heartfelt thanks to

I acknowledge with thanks the co-operation extended to me by the librarians

All my friends and well-wishers, whose names I am unable to count here,

Here, The researcher has made research report on “dividend announcement

In chapter 1. The researcher has general overview about Impact of Dividend

In chapter 4, The researcher has included Theoretical framework. In this

In chapter 6, The researcher has included research methodology in which

In chapter 7, The researcher has included data analysis and interpretation. In

SR. TOPIC PAGE

A stock market, equity market or share market is the aggregation of buyers

1.1 About SEBI:

SEBI’s management is composed of its own members. Its management team

1.2History and Milestones of BSE:

1.2.2. Milestones of BSE:

Date BSE Milestones

3rd February, BSE become India’s 1st listed stock Exchange.

9th January, Hon’ble Prime Minister of India, Shri

From 2006 to 2016

Date BSE milestones

9th June, 2016 BSE announces commencement of trading of

28th May, 2015 BSE exceeds 1 billion derivatives contract on

22ndOctober, BSE inks strategic partnership with YES

28th November, Launch of currency Derivatives(BSE CDX)

21ST First to introduce Mobile- based Trading

7th March, 2007 Singapore Exchange Limited entered into an

20th May,2005 The BSE (Corporation and Demutualization)

21stJuly, 1997 Brokers Contingency Fund (BCF) introduced

14th BSE On-line trading (BOLT) system

10thJuly, 1987 Investor’s protection Fund (IPF) introduced.

1.3. History and Milestones of NSE:

National Stock Exchange has a total market capitalization of more than

2016 Launched NIFTY 50 index futures trading on TAIFEX

2015 Entered into a memorandum of understanding to exchange the

2014 Launched NMF-II platform for mutual funds.

2012 Launched SME-specific EMERGE platform for the listing and

2011 Commenced trading in index futures and options on global indices,

1.3.2 Milestones of NSE:

2010 Launched trading in currency Options

2009 Launched Mutual Fund Services System(MFSS)

2008 Establishment of securities lending and Borrowing

2005 Launched NIFTY bank index derivatives.

2001 Launched single stock futures and options on the

1.5 Settlement Cycle and Trading Hours:

1.6 Market Indexes:

1.7 Market Regulation:

1.8 Investors of India:

India started permitting outside investments only in the 1990s. Foreign

1.9 Online and Offline Trading:

Traditionally stock trading was done through stock brokers personally or

1.10 Demat Account and Trading Account:

1.11 Depository and Depository Participants:

Depository Participant (DP) acts as intermediaries between the depository and