DETERMINANTS OF DIVIDEND POLICY IN INFORMATION TECHNOLOGY COMPANIES LISTED ON THE BOMBAY STOCK EXCHANGE: AN EMPIRICAL ANALYSIS

Abstract

The purpose of this study is to examine the influence of profitability, leverage, liquidity and firm size on the dividend payout ratio of Information Technology companies listed on the Bombay Stock Exchange. The study adopts a quantitative and explanatory research design based on secondary financial data drawn from the published annual reports of five sampled companies for the period 2022 to 2026, yielding twenty-five firm-year observations. Profitability is measured by return on assets, leverage by the ratio of total debt to total assets, liquidity by the current ratio and firm size by the natural logarithm of total assets, while the dividend payout ratio serves as the dependent variable. Descriptive statistics and multiple linear regression analysis were carried out using IBM SPSS Statistics. The descriptive results reveal moderate variation across the explanatory variables and considerable dispersion in dividend distribution practices among the sampled firms, with an average payout ratio of 67.82 per cent. The regression results indicate a moderate association between the explanatory variables and the dividend payout ratio, with a multiple correlation coefficient of 0.539 and a coefficient of determination of 0.291. However, the overall regression model is not statistically significant at the five per cent level, and none of the explanatory variables individually exerts a significant influence on payout decisions. The findings suggest that dividend policy in the Indian Information Technology sector is shaped by broader strategic and organisational considerations rather than by conventional financial indicators alone. The study offers recent empirical evidence and practical insights for managers, investors and researchers concerned with corporate payout behaviour.