Top 10 Dividend Paying Stocks in India (2025 Guide for Passive Income)
Dividend investing is one of the safest ways to build passive income from the stock market. In India, several companies reward shareholders with consistent dividend payouts. This 2025 guide explores the top 10 dividend paying stocks that can help you earn steady income while building long-term wealth.
1) ITC Limited
ITC is one of the most consistent dividend paying companies in India. With businesses across FMCG, hotels, and paper, ITC has been rewarding investors for decades.
Case Study: In the last 10 years, ITC’s dividend yield has averaged around 4–5%, making it a favorite for income-focused investors.
2) Coal India
Coal India, the world’s largest coal producer, is a PSU known for its high dividend payouts. It regularly shares a significant portion of its profits with shareholders.
Highlight: In FY 2023–24, Coal India declared record dividends thanks to strong demand in the power sector.
3) Oil & Natural Gas Corporation (ONGC)
ONGC is another PSU giant that pays regular dividends. Its strong cash flows from oil & gas operations allow it to maintain steady payouts.
Pro Tip: Energy sector companies like ONGC are defensive plays that reward long-term holders with dividends.
4) HDFC Bank
HDFC Bank, India’s leading private bank, is not just a growth stock but also a consistent dividend payer. Its stable profits allow it to maintain steady payouts.
Case Study: An investor holding HDFC Bank for 20 years has seen massive capital appreciation along with regular dividends.
5) Infosys
Infosys, one of India’s top IT companies, has a track record of rewarding shareholders through dividends and buybacks. It’s a must-have in a dividend investor’s portfolio.
Highlight: Infosys maintained high payout ratios during 2020–2025, keeping investors happy with consistent returns.
6) Tata Consultancy Services (TCS)
TCS, India’s largest IT company, is not only a growth engine but also a strong dividend payer. Its global client base ensures stable revenues and shareholder rewards.
Case Study: TCS consistently declared dividends with payout ratios above 35%, creating a balance of growth + passive income.
7) Hindustan Zinc
A Vedanta Group company, Hindustan Zinc is among India’s highest dividend payers. With strong cash flows from zinc and silver production, it remains a top pick.
Highlight: Hindustan Zinc’s 2023–24 dividends crossed ₹30 per share, a record in PSU-linked companies.
8) NALCO (National Aluminium Company)
NALCO is a PSU under the Ministry of Mines. Its dividend payouts are strong due to its cash-rich operations in aluminium and power sectors.
Pro Tip: PSUs like NALCO regularly reward shareholders because the government holds majority stakes.
9) Power Grid Corporation of India
Power Grid, India’s central transmission utility, is a defensive dividend stock. With steady revenues and low risk, it’s perfect for conservative investors.
Case Study: Power Grid maintained dividends even during economic slowdowns, proving its stability.
10) State Bank of India (SBI)
SBI, India’s largest bank, provides both growth and dividends. With strong digital banking adoption and improving profits, SBI is rewarding shareholders steadily.
Highlight: In 2024, SBI announced its highest-ever dividend payout, reflecting its strong financial position.
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📚 Recommended Books for Dividend Investing
- The Intelligent Investor – Benjamin Graham
- The Little Book of Big Dividends – Charles B. Carlson
- One Up on Wall Street – Peter Lynch
- Coffee Can Investing – Saurabh Mukherjea
Pro Tip: These books help you understand value investing, passive income strategies, and compounding through dividends.
❓ Frequently Asked Questions
1) What are dividend stocks?
Dividend stocks are shares of companies that distribute a part of their profits to shareholders regularly.
2) Are dividend stocks safe?
Yes, especially bluechip and PSU companies. They provide steady income but may grow slower than growth stocks.
3) How often are dividends paid in India?
Most companies pay annually or semi-annually. Some pay quarterly.
4) Which sectors pay the highest dividends?
PSUs (oil, coal, power), banks, and FMCG companies pay high dividends.
5) Can dividend income be tax-free?
No. Dividend income is taxable as per your income tax slab in India.
6) Which stock has the highest dividend yield?
Coal India and Hindustan Zinc are among the highest dividend yield stocks in 2025.
7) Do IT companies pay dividends?
Yes, Infosys and TCS are consistent dividend payers.
8) What is dividend yield?
Dividend yield = Dividend per share ÷ Share price × 100. It shows % return via dividends.
9) Are PSU dividends reliable?
Yes, because the government often mandates high dividend payouts from PSUs.
10) Should I invest only in dividend stocks?
No. Balance your portfolio with growth stocks for capital appreciation.
11) Can dividends beat inflation?
Yes, if companies grow profits and increase dividends regularly.
12) Are dividend stocks good for retirees?
Yes, they provide steady passive income with lower risk.
13) How do I reinvest dividends?
You can buy more shares of the same stock or invest in other dividend stocks.
14) Can mutual funds provide dividends?
Yes, mutual funds have “dividend payout” and “growth” options.
15) What is the golden rule of dividend investing?
Pick companies with consistent profits, low debt, and long-term stability.
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