Abstract Dividend is defined as the percentage of retained earnings distributed to the shareholders. The topic of dividend has been extensively studies but it is still one of the debated topic in literature. Dividend payout also indicates the financial health of the company. The companies paying zero or no dividend are not good from the investors point of view as they assumed it to be at a growing stage or some bad past history. Dividend payments has been viewed as an important signalling device by the firm to the investors as the firm paying dividend have high worth in eyes of the investors. In this paper an attempt has been made to study the trends in dividend payments by the firm. It has been viewed that dividend has reappeared in the recent years and firms have realised the importance of dividend payments. The data of the companies belonging to different industries has been collected from CMIE prowess for the five years period ranging from March 2010 to March 2014.dividend payouts of the firm has significantly increased over the years which is in support of signalling theory and bird in hand theory.