Top Small-Cap Dividend Stocks in India: High Yields and Consistent Payouts

Dividend-paying stocks continue to attract investors who seek regular income alongside long-term wealth growth. A dividend is a portion of a company’s earnings that is distributed to its shareholders, usually every quarter or once a year. For income-focused investors, the dividend yield, calculated as annual dividends divided by the stock’s current price, is a key metric to evaluate potential returns.

Small-cap stocks, often overlooked, can provide strong dividend yields while reflecting consistent profitability and healthy cash flows. Here’s a closer look at some of India’s small-cap dividend stocks delivering robust yields above 6%.

Market Snapshot: Dividend Yield Leaders

• MSTC – Dividend Yield: 8%
  MSTC tops the list with an 8% dividend yield, based on a CMP of ₹479 and total dividends of ₹36.5 in the past year. In 2025, the company declared multiple dividends: a ₹32 per share second interim dividend in February and a ₹4.50 per share third interim dividend in April. Earlier payouts in 2024 included ₹4, ₹5, and ₹5 at different intervals, highlighting its steady income distribution.
• PTC India – Dividend Yield: 7%
  PTC India remains a reliable dividend payer in the utilities sector, offering a 7% yield with dividends totaling ₹11.7 against a CMP of ₹158. In 2025, the company issued an interim dividend of ₹5 per share in May and a final dividend of ₹6.70 per share in August, reflecting consistent shareholder returns.
• Castrol India – Dividend Yield: 7%
  Castrol India continues to deliver strong payouts with a 7% dividend yield, paying ₹13 per share over the last year. Key 2025 payouts included a final dividend of ₹9.50 (including a ₹4.50 special dividend) in March and an interim dividend of ₹3.50 in August, demonstrating steady profits and cash generation.
• Thyrocare Technologies – Dividend Yield: 7%
  Thyrocare offered a 7% dividend yield with total dividends of ₹28 per share at a CMP of ₹429. In 2025, the company declared a final dividend of ₹21 per share in July and an interim dividend of ₹7 per share in October, following a strong performance and a 2:1 bonus issue in October.
• CESC – Dividend Yield: 6%
  CESC provides a consistent income with a 6% dividend yield, distributing ₹10.5 per share against a CMP of ₹171. In 2025, two interim dividends were announced: ₹4.50 in January and ₹6 in October, showcasing its dependable dividend policy.
• Honda India Power Products – Dividend Yield: 6%
  Honda India Power Products delivered a 6% yield, paying a total of ₹131.5 per share over the last year with a CMP of ₹2,336. The company issued a special/interim dividend of ₹10 in February and a final dividend of ₹21.50 in September, reflecting robust earnings and a strong balance sheet.

Why Dividend Stocks Matter

Investing in dividend-paying small-cap stocks offers a dual advantage:

1. Regular income through consistent dividend payouts.
2. Potential capital appreciation as many small-cap dividend stocks are poised for growth.

Investors often consider not just the dividend yield, but also profitability, cash flow, and sector trends to identify high-quality dividend stocks.

Summary

Small-cap dividend stocks like MSTC, PTC India, Castrol India, Thyrocare, CESC, and Honda India Power Products demonstrate strong dividend yields above 6%, combining income potential with consistent profitability. These companies highlight how strategic dividend investing in the Indian stock markets can provide stable returns, making them appealing to both income-focused and long-term investors.