This smallcap company lines up hefty dividend, but stock plunges over 9%

Accelya Solutions will pay out Rs 52.24 crore in dividends. The company, which follows July-June year, has a track record of paying dividend twice in a year – in October and in February.

The dividend payment this time is nearly equal to the profit it has recorded in the last six months which is Rs 58.32 crore. That means, the company is not keeping much in its coffers for either rainy days or making new investments. Usually, investors see such a trend when companies don’t keep some cash for themselves as red flags.

Promoter Vista Equity Partners, a US-based investment firm, holds 74.66 percent stake in the firm. Hence, the lion’s share of the dividend payout will go to them.

For the quarter ended December, the company reported a consolidated net profit of Rs 2,5.21 crore, up from 16.98 crore a year back.