Tata Sons is prioritizing financing new ventures over increasing dividend payouts

Tata Sons has seen a notable increase in net profits in recent years, but the group’s holding company has mainly channeled these profits into new ventures, rather than opting for higher dividend payouts. The main beneficiaries of the dividends remain Tata Trusts, which have a 66 percent stake in Tata Sons, and the Shapoorji Pallonji Group. The Trusts in turn use these proceeds to fund their wide range of philanthropic initiatives.

In FY24, Tata Sons paid out 4.1 percent of its net profit as dividends to its shareholders, slightly above the recorded payout ratio of 3.2 percent.