Vedanta announces 2nd dividend of ₹19.5 apiece; stock rises 1%

Anil Agarwal-led Vedanta Ltd has announced its second interim dividend of ₹19.5 per share for the financial year 2022-23. The metals and mining company's total payout would stand at ₹7,250 crore.

"The board of directors of the company through a resolution passed by circulation on Tuesday, July 19, 2022, have approved a second interim dividend of ₹19.50 per equity share i.e. 1,950% on the face value of Re. 1/- per share for the financial year 2022-23 amounting to ₹7,250 crores," Vedanta says via a stock exchange filing.

The company has set July 27, 2022, as the record date for the dividend payment. Before this, Vedanta had announced an interim dividend of ₹31.5 per share on May 6, 2022, and an interim dividend of ₹13.5 per share on December 17, 2022.

The announcement by the company came after the market hours, though the stock rose 1.03% to ₹239.90 on the National Stock Exchange today, in line with BSE Sensex which ended 0.45% higher. Vedanta shares have fallen 26.67% in the past six months; 32.19% in the year-to-date period; and about 6% in the past one year from a 52-week high of ₹437.75 on April 11, 2022.

Vedanta Ltd, a subsidiary of Vedanta Resources Ltd, has interests in zinc-lead-silver, iron ore, steel, copper, aluminium, power, nickel, and oil and gas. With a total workforce of 76,000, Vedanta has strategic assets in India, South Africa and Namibia.

In its annual report released on July 15, 2022, Vedanta said under its dividend policy, a minimum of 30% of attributable profit after tax will be distributed as dividends. The company had approved the first interim dividend of ₹18.50 apiece; the second interim dividend worth 13.50 apiece; and the third interim dividend worth ₹13 apiece for FY22.

In his note to shareholders, Agarwal, who's non-executive chairman of Vedanta Ltd, said there is significant space for import substitution of minerals such as zinc and oil & gas, where India freely allows imports for domestic consumption. "Our strong liquidity position and deleveraging focus peg our debt at a very comfortable level. Reflecting this, both CRISIL and India Ratings upgraded our credit rating to ‘AA’ with a stable outlook."

For the year 2021-22, Vedanta's profit grew 95% to ₹24,299 crore ((before exceptional and one-time tax credit), while its revenue rose 51% to ₹1.3 lakh crore. Its EBITDA was up 66% at ₹45,319 crore and the EBITDA margin grew 39% and its total debt stood at ₹53,109 crore. The company will announce its Q1 FY23 financial results on July 28, 2022.

Besides in June, Vedanta ventured into international iron ore mining operations in Liberia, West Africa, through its subsidiary Western Cluster Limited, Liberia (WCL). WCL is a subsidiary of Bloom Fountain Limited (BFL) which is, in turn, a wholly-owned subsidiary of Vedanta Limited.