Our work is based on how ownership structure influenced and impacted dividend payment decisions of Indian non-financial companies that are listed and part of NIFTY 100. Dividend payment is one of the major financial decisions, which has potential to influence the value of companies. As part of ownership structure, which is the main independent variable of the study, we considered shareholding of promoters, foreign institutional investors (FIIs), and domestic institutional investors (DIIs) and investigated the impact of their shareholding on dividend payout decisions, which is the dependent variable in this study. We used return on assets (ROA), debt equity ratio, and size of companies as instrument variables. Our results indicated that ownership structure of Indian non-financial companies is of concentrated type and chiefly concentrated in the hands of promoters and groups. Using two-stage least squares regression model and with the help of instrument variable method, we found promoters, foreign institutional investors, and domestic institutional investors – all to be sharing a significant negative relationship with dividend payment decisions of companies, demonstrating the dominant shareholding type of companies engaged in sharing profits with shareholders in the form of dividends at lower rates and preferring to retain major chunk of profits for future investments and capital requirements.

1. Balasubramanian, N. B., & Ramaswamy, A. (2014). Ownership trends in corporate India (2001– 2011) : Evidence and implications (NSE Working Paper WP/11/2014). www1.nseindia.com/research/content/res_WorkingPaper11.pdf
2. Batra, G., & Munjal, A. (2018). An analytical study on determinants of capital structure composition during the post liberalization period in India. Indian Journal of Finance, 12(4), 20–36. https://doi.org/10.17010/ijf/2018/v12i4/122792
3. Benjamin, G., & David, D. (1934). Security analysis : Principles and technique (2nd ed.). McGraw Hill.
4. Carney, R. W., & Child, T. B. (2013). Changes to the ownership and control of East Asian corporations between 1996 and 2008 : The primacy of politics. Journal of Financial Economics, 107(2), 494-513. https://doi.org/10.1016/j.jfineco.2012.08.013
5. Claessens, S., & Yurtoglu, B. B. (2013). Corporate governance in emerging markets : A survey. Emerging Markets Review, 15, 1–33. https://doi.org/10.1016/j.ememar.2012.03.002
6. De, A., & Banerjee, A. (2017). Capital structure and its determinants during the pre and post period of recession: Pecking order vs. trade off theory. Indian Journal of Finance, 11(1), 44–58. https://doi.org/10.17010/ijf/2017/v11i1/108961
7. De Cesari, A., Espenlaub, S., Khurshed, A., & Simkovic, M. (2012). The effects of ownership and stock liquidity on the timing of repurchase transactions. Journal of Corporate Finance, 18(5), 1023-1050. https://doi.org/10.1016/j.jcorpfin.2012.06.004
8. DeAngelo, H., & DeAngelo, L. (1990). Dividend policy and financial distress : An empirical investigation of troubled NYSE firms. The Journal of Finance, 45(5), 1415–1431. https://doi.org/10.2307/2328743
9. Eldhose, K. V., & Santhosh Kumar, S. (2019). Determinants of financial leverage : An empirical analysis of manufacturing companies in India. Indian Journal of Finance, 13 (7), 41–49. https://doi.org/10.17010/ijf/2019/v13i7/145534
10. Faccio, M., Lang, L. H., & Young, L. (2001). Dividends and expropriation. The American Economic Review, 91(1), 54 –78. https://dx.doi.org/10.2139/ssrn.222428
11. Gordon, M. (1963). Optimal investment and financing policy. The Journal of Finance, 18(2), 264-272. https://doi.org/10.2307/2977907
12. Grinstein, Y., & Michaely, R. (2005). Institutional holdings and payout policy. https://dx.doi.org/10.2139/ssrn.308870 Gujarati, D. (2011). Basic econometrics (2nd ed.). McGraw Hill.
13. Han, K.C., Lee, S. H., & Suk, D. Y. (1999). Institutional shareholders and dividends. Journal of Financial and Strategic Decisions, 12(1), 53-62.
14. Harada, K., & Nguyen, P. (2011). Ownership concentration and dividend policy in Japan. https://doi.org/10.1108/03074351111115313
15. Jagannathan, U., & Suresh, N. (2017). The nature and determinants of capital structure in Indian service firms. Indian Journal of Finance, 11(11), 30-43. https://doi.org/10.17010/ijf/2017/v11i11/119340
16. Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. https://dx.doi.org/10.2139/ssrn.99580
17. Jeon, J. Q., Lee, C., & Moffett, C. M. (2011). Effects of foreign ownership on payout policy : Evidence from the Korean market. Journal of Financial Markets, 14(2), 344–375. https://doi.org/10.1016/j.finmar.2010.08.001
18. jiang, Y., & Peng, M. W. (2011). Are family ownership and control in large firms good, bad, or irrelevant ? Asia Pacific Journal of Management, 28(1) 15-39. https://doi.org/10.1007/s10490-010-9228-2
19. John, K., & Williams, J. (1985). Dividends, dilution, and taxes: A signalling equilibrium. The Journal of Finance, 40(4), 1053-1070. doi.org/10.1111/j.1540-6261.1985.tb02363.x
20. Kavya, B., & Shijin, S. (2017). Ownership and control of widely and closely held firms in India. Vision : The Journal of Business Perspective, 21(4), 449-460. https://doi.org/10.1177%2F0972262917738895
21. La Porta, R., Lopez - de - Silanes, F., Shleifer, A., & Vishny, R. (1998). Law and Finance. Journal of Political Economy, 106(6), 1113-1155. https://doi.org/10.1086/250042
22. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (2000). Agency problems and dividend policies around the world. The Journal of Finance, 55(1), 1-33. https://doi.org/10.1111/0022-1082.00199
23. Lam, K. C., Sami, H., & Zhou, H. (2012). The role of cross - listing, foreign ownership and state ownership in dividend policy in an emerging market. China Journal of Accounting Research, 5(3), 199-216. https://doi.org/10.1016/j.cjar.2012.06.001
24. Lintner, J. (1962). Dividends, earnings, leverage, stock prices, and supply of capital to corporations. The Review of Economics and Statistics, 44(3), 243-269. https://doi.org/10.2307/1926397
25. Lv, H., Li, W., & Gao, S. (2012) Dividend tunnelling and joint expropriation : Empirical evidence from China's capital market. The European Journal of Finance, 18(3–4), 369–392. https://doi.org/10.1080/1351847X.2011.579741
26. Mancinelli, L., & Ozkan, A. (2006). Ownership structure and dividend policy: Evidence from Italian firms. The European Journal of Finance, 12(3), 265-282. https://doi.org/10.1080/13518470500249365
27. Miller, M., & Modigliani, F. (1961). Dividend policy, growth, and the valuation of shares. The Journal of Business, 34(4), 411-433. https://www.jstor.org/stable/2351143
28. Ramli, N. M. (2010). Ownership structure and dividend policy: Evidence from Malaysian companies. https://ssrn.com/abstract=1753390
29. Ross, S. (1977). The determination of financial structure : The incentive-signalling approach. The Bell Journal of Economics, 8(1), 23-40. https://doi.org/10.2307/3003485
30. Rozeff, M. S. (1982). Growth, beta and agency costs as determinants of payout ratios. The Journal of Financial Research, 5(3), 249-259. https://doi.org/10.1111/j.1475-6803.1982.tb00299.x
31. Santhosh Kumar, S., & Bindu, C. (2018). Determinants of capital structure: An exclusive study of passenger car companies in India. Indian Journal of Finance, 12(5), 43–53. https://doi.org/10.17010/ijf/2018/v12i5/123695
32. Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737-783. https://doi.org/10.1111/j.1540-6261.1997.tb04820.x