Dividend Reinvestment (DRIP) Calculator
This dividend reinvestment (DRIP) calculator shows how automatically reinvesting dividends into more shares compounds your holdings over time — growing both your share count and your dividend income each year, not just your account balance. Enter your numbers to see the long-run effect.
How much you're starting with.
How much the dividend per share is expected to grow each year.
Expected yearly growth in the share price itself.
How many years you plan to hold and reinvest.
Final portfolio value
Log in to save₹5,51,298
How to use this dividend reinvestment (drip) calculator
- 1Initial investment and current share price: used to calculate your starting share count.
- 2Annual dividend per share and its expected growth rate: check the stock's dividend history for a realistic growth assumption.
- 3Annual share price growth: a separate assumption from dividend growth — a stock can grow its dividend even if the price itself is flat.
Understanding your results
Final portfolio value is your ending share count times the projected future share price. Final share count is the real story of DRIP investing — every reinvested dividend buys more shares, which then earn their own dividends, compounding on top of ordinary price appreciation.
The formula
Each year: new shares = (Shares × Dividend per share) ÷ Price, then Price and Dividend both growEach year, the total dividend received (share count times per-share dividend) buys additional shares at that year's price. Both the share price and the per-share dividend then grow at their own independent assumed rates for the following year — this is what makes DRIP compounding different from simple price appreciation: your share count itself grows every year, not just the value per share.
A worked example
A ₹1,00,000 investment at ₹500/share (200 shares), with a ₹15 annual dividend growing 5%/year and the share price growing 6%/year, held for 20 years: reinvested dividends steadily buy extra shares each year, taking the share count from 200 to about 344, with roughly ₹1,36,660 of dividends reinvested along the way. The final portfolio value works out to about ₹5,51,298 — noticeably more than the ₹3,20,714 that price appreciation alone (200 shares, no reinvestment) would have produced, purely from the compounding effect of a growing share count.
Things to know
DRIP investing works best with genuinely dividend-growing companies — a static or shrinking dividend limits the compounding effect this calculator models. Most Indian brokers and demat accounts support automatic or manual dividend reinvestment into additional shares, making this strategy straightforward to execute without manual effort each payout.
Frequently asked questions
Are reinvested dividends still taxable?+
Yes — in India, dividends are taxable in your hands at your slab rate in the year received, even if immediately reinvested into more shares. There is no tax-free reinvestment wrapper for direct equity the way there is for instruments like PPF or ELSS.
Does DRIP always beat taking dividends as cash?+
For long-term compounding growth, reinvesting generally builds a larger portfolio than taking cash — but if you need the income now (e.g. in retirement), taking dividends as cash may better match your actual goals.
What if a company cuts its dividend?+
This calculator assumes steady dividend growth — a real dividend cut would reduce both your income and the reinvestment amount, and often signals broader problems with the company worth investigating before assuming growth will resume.
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