Vedanta Ltd shares to be in focus on Tuesday morning after the Anil Agarwal-led business declared dividends of Rs 7,821 crore for the current fiscal year. Vedanta said that its board has authorized a third interim dividend of Rs 20 per share for FY25, with Tuesday, September 10, 2024, designated as the record date for dividend payment. Vedanta stated that the interim dividend will be paid within the time frame specified by law.
Vedanta previously announced interim dividends of Rs 4 and Rs 11 per share, respectively. With this, Vedanta has already announced dividends of Rs 35 per share for FY25. As on June 30, promoters held a 56.38 percent interest in Vedanta.
Vedanta announced a total dividend of Rs 10,959 crore, or Rs 29.50 per share, for FY24. The dividend yield stood at 10.86 percent. It declared a dividend of Rs 101.50 per share for fiscal year 2023, totaling Rs 37,572 crore. Vednata paid out Rs 16,689 crore, or Rs 45 per share, in dividends to shareholders in FY22. In FY21, Vedanta declared a total dividend of Rs 3,519 crore, or Rs 9.50 per share.
There were prior concerns about Vedanta's parent company, Vedanta Resources, and its rising debt. Vedanta Resources sold a 2.7% interest in Vedanta during the June quarter. Vedanta also sold its 1.51% interest in Hindustan Zinc. Furthermore, it obtained $1 billion through qualified institutional placement, which analysts believe might lead to increased liquidity and flexibility. The steps are seen positively because they might assist retire high-cost borrowing, resulting in lower interest outflows and the release of pledged shares.
India Ratings raised Vedanta's commercial paper (CP) rating and changed Rating Watch to 'Positive Implications' last week, citing better liquidity and financial flexibility as a result of the metals and mining major's capacity to acquire cash through share sales and the QIP, which will be completed in July 2024.
"The ratings reflect Vedanta's better cash position as a result of receiving funds from stake dilution, which are being utilized to deleverage both at VRL and VDL, resulting in the repayment of high-cost borrowing and an anticipated lower interest outflow. However, VRL will continue to rely on Vedanta's cash flows to fulfill forthcoming debt maturities and refinance in a timely way," India Ratings stated.
Hindustan Zinc has paid a second interim dividend of Rs 19 per equity share for the fiscal year 2024-25, totaling Rs 8,028.11 crore. Vedanta, which held 2,74,31,54,310 shares, or 64.92 percent interest in Hindustan Zinc as of June 30, will get Rs 5,212 crore in dividends.
Meanwhile, Vedanta intends to demerge into six distinct listed standalone firms, with Vedanta Resources serving as the holding company. The demerger has been admitted to the NCLT and is likely to be completed within the next two to three quarters.
