To generate a monthly dividend income of ₹10,000 (which translates to ₹1,20,000 annually), the amount you need to invest depends on the dividend yield of the stocks you choose. Dividend yield is calculated as:
Dividend Yield = (Annual Dividend per Share / Stock Price) × 100
To find the investment amount required, you can use this formula:
Investment Amount = Desired Annual Income / Dividend Yield (in decimal form)
For ₹1,20,000 annual income, the investment needed for different dividend yields would be:
- 5% yield: ₹1,20,000 / 0.05 = ₹24,00,000
- 7% yield: ₹1,20,000 / 0.07 = ₹17,14,286
- 10% yield: ₹1,20,000 / 0.10 = ₹12,00,000
So, depending on the yield, you’d need to invest between ₹12 lakh and ₹24 lakh. However, most Indian stocks pay dividends quarterly, semi-annually, or annually—not monthly. To achieve a steady monthly income, you’d need to diversify across stocks with staggered payout schedules or reinvest dividends strategically. Below, I’ll list some high-dividend-yield stocks in India based on available data as of April 2025, along with examples of how much you’d need to invest in each to reach your goal.
High-Dividend Stocks in India (Examples)
Here are some stocks known for high dividend yields in India, based on recent trends and data up to April 2025. Note that stock prices and yields fluctuate, so these are illustrative examples:
- Vedanta Ltd
- Dividend Yield: ~10.87%
- Annual Dividend per Share: Assume ₹29.36 (based on a stock price of ~₹270 as of recent data)
- Investment Needed: ₹1,20,000 / 0.1087 ≈ ₹11,03,680
- Shares Required: ₹11,03,680 / ₹270 ≈ 4,088 shares
- Coal India Ltd
- Dividend Yield: ~6.16% (based on historical payouts, e.g., ₹61,600 annually on ₹10 lakh investment)
- Annual Dividend per Share: ~₹24.64 (assuming a price of ~₹400)
- Investment Needed: ₹1,20,000 / 0.0616 ≈ ₹19,48,052
- Shares Required: ₹19,48,052 / ₹400 ≈ 4,870 shares
- Bharat Petroleum Corporation Ltd (BPCL)
- Dividend Yield: ~7.58%
- Annual Dividend per Share: ~₹45.48 (assuming a price of ~₹600)
- Investment Needed: ₹1,20,000 / 0.0758 ≈ ₹15,83,113
- Shares Required: ₹15,83,113 / ₹600 ≈ 2,638 shares
- Indian Oil Corporation Ltd (IOCL)
- Dividend Yield: ~9.07%
- Annual Dividend per Share: ~₹13.61 (assuming a price of ~₹150)
- Investment Needed: ₹1,20,000 / 0.0907 ≈ ₹13,23,153
- Shares Required: ₹13,23,153 / ₹150 ≈ 8,821 shares
- Hindustan Zinc Ltd
- Dividend Yield: ~5.93% (e.g., ₹59,300 annually on ₹10 lakh)
- Annual Dividend per Share: ~₹59.30 (assuming a price of ~₹1,000)
- Investment Needed: ₹1,20,000 / 0.0593 ≈ ₹20,23,609
- Shares Required: ₹20,23,609 / ₹1,000 ≈ 2,024 shares
- Power Finance Corporation (PFC)
- Dividend Yield: ~7-8% (historically consistent)
- Annual Dividend per Share: ~₹35 (assuming a price of ~₹500)
- Investment Needed: ₹1,20,000 / 0.07 ≈ ₹17,14,286
- Shares Required: ₹17,14,286 / ₹500 ≈ 3,429 shares
Key Considerations
- Dividend Frequency: Most of these companies pay dividends annually or semi-annually, not monthly. To approximate monthly income, you could spread investments across stocks with different payout schedules or use a dividend reinvestment strategy and withdraw manually.
- Stock Price Fluctuations: Yields change with stock prices, so a falling price increases yield but may signal risk.
- Sustainability: High yields can indicate financial distress if the payout ratio (dividend/earnings) exceeds 100%. Check the company’s financial health.
- Diversification: Investing in a single stock is risky. A portfolio of 3-5 stocks across sectors (e.g., energy, metals, finance) reduces risk.
Example Portfolio
To achieve ₹1,20,000 annually with an average yield of ~7.5%:
- Invest ₹5 lakh in Vedanta (10.87% yield) = ₹54,350
- Invest ₹5 lakh in BPCL (7.58% yield) = ₹37,900
- Invest ₹5 lakh in Coal India (6.16% yield) = ₹30,800
- Total: ₹1,23,050 annually (≈ ₹10,254 monthly)
You’d need ~₹15 lakh total. Adjust based on current prices and yields.
Final Note
These figures are based on historical and recent data up to April 2025. Stock market investments carry risks, and dividends aren’t guaranteed. Research each company’s fundamentals (earnings, payout ratio, debt) and consult a financial advisor before investing.
Disclaimer: wizard look is not a financial adviser; please consult your financial expert
