A dividend warrant is a physical payment instrument—essentially a cheque issued by a company—that authorises the payment of dividends to a specific shareholder. Historically, dividend warrants were the primary mode of dividend distribution in India before electronic payment infrastructure became widespread. Today, SEBI mandates that companies with large shareholder bases use electronic credit transfer (NEFT/RTGS/ECS) as the default mode of dividend payment. Physical dividend warrants are now primarily issued to shareholders who have not updated their bank account details with their depository participant, and they come with a validity period within which they must be presented for encashment.
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