A half yearly update on Passive Income 🤑

April & May saw zero income for me from equity. This maybe due to the fact that for companies in India, March marks the financial year end; the next two months are spent compiling the financial results and when the results are finally approved and announced, so are the dividends, if any. Even the Q4 payouts from the REIT and InvITs come only by June. There are a few other lacklustre months in a year, December & January are another pair. For these dismal months and I need to find an alternative income stream.

February 2020 was a good month; it started with the payouts from the REIT and InvITs. Then there are few companies that declared dividend after the good sales during the festival season which falls during Q3 in India. This year from my portfolio, there were dividends from the publishing house D B Corp, the two wheeler company Hero Motocorp, pharma company Sun Pharmaceuticals, the public sector company Oil India and the amusement park owner Wonderla Holidays.

March 2020 was when the lockdown was first announced and also the new income tax rules removing the dividend distribution tax but clubbing the dividend income with the other normal income and being taxed in the hands of the individuals, starting from the next financial year. Keeping these changes in mind, some companies doled out more dividends before the next financial year. In my portfolio these included the two wheeler company TVS Motor Company, the FMCG company Jyothy Labortaories, the energy exchange IEX, the brokerage house Geojit, the public sector NTPC and the auto ancillary Menon Bearings.

June 2020 saw only the quarterly payouts from the REIT and InvITs. And I have to add July to month of no equity income.

August 2020 was a good month; began once again with the quarterly payouts from the REIT and InvITs. The companies that declared final dividend for the year ended in Mar 2020, made their payouts after the board meetings and AGM approvals. These included the pharma cum financier Piramal Enterprise, the stock exchange BSE Ltd, the realtor Sobha Ltd, once again Hero Motorcorp, Sun Pharmaceuticals, the watch and jewellery maker Titan and the cookware manufacturer TTK Prestige.

Howard Marks, Co-founder Oaktree Capital Management, USA

There other good dividend paying companies to consider such as the mortgage lender HDFC Ltd, the brokerage ICICI Securities. September marks the end of Q2 and let’s see how the rest of the year plays out.

Till next post, take care !!

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