The country's largest two-wheeler maker Hero Honda on Thursday declared a 3,500% interim dividend of Rs 70 per equity share of Rs 2 each.
In its board meeting held today, the company considered and declared "an interim dividend at the rate of 3,500% that is Rs 70 per equity share of Rs 2 each", Hero Honda said in a filing to the Bombay Stock Exchange (BSE).
The company, however, did not mention how much will be the capital outgo due to this exercises and other details regarding the period for the dividend.
Repeated calls to Chief Financial Officer Ravi Sud and to a company spokesperson remained unanswered.
Reacting sharply, the shares of Hero Honda were trading 6.28% up at Rs 1,742 a piece on the BSE during late-afternoon.
In March last year, the company declared a Silver Jubilee Special Dividend of 4,000% or Rs 80 per equity share of Rs 2 each.
In 2009, Hero Honda had said it was sitting on a huge cash reserve of over Rs 4,000 crore and the company was looking at many options to use the fund, including special dividend to its shareholders or expanding capacity.
During April-December, 2010, the company's net profit fell by 12.66% to Rs 1,426.29 crore from Rs 1,633.02 crore in the same period previous year.
The total net operating income during the 9-month period increased by 19.36% to Rs 14,010.22 crore from Rs 11,738.19 crore in the year-ago period.
Meanwhile, Hero Honda appointed Toshiyuki Inuma as a Non-Executive Additional Director with effect from April 13.
Besides, the company also approved resignations of its Non-Executive Director Yuji Shiga and Non-Executive and Independent Director Shobhana Bhartia from its board with effect from April 13.
In December last year, the Indian promoter of the two-wheeler maker, the B M Munjal family, had agreed to buyout the entire 26% stake of the Japanese promoter Honda Motor Co in Hero Honda for Rs 3,841.83 crore. The process of Honda exiting the joint venture completed this month.