Vedanta declares 5th interim dividend of ₹20.5; stock rises 1%

Shares of Vedanta remained in focus on Wednesday after the mining company declared fifth interim dividend for the financial year ending March 31. Billionaire mining tycoon Anil Agarwal-led company will pay a dividend of ₹20.50 per equity share, or at 2,050% of the face value of ₹1 per share, which will amount to ₹7,621 crore. Earlier this year, the metal and mining major declared a total interim dividend of ₹81 per share in four pay-outs - ₹31.50 in May, ₹19.50 in June, ₹17.50 in November, and ₹12.50 in February. With the fifth dividend, Vedanta’s total outgo for the current fiscal will be ₹101.5 per share, which amount to ₹37,730 crore, the highest ever by the company.

Following the announcement, shares of Vedanta opened 1.3% higher at ₹277.75 against the previous closing price of ₹274.20 on the BSE. In the first hour of trade so far, the mining stock touched a high and low of ₹278.40 and ₹272.95, respectively, while the market capitalisation stood at ₹1.03 lakh crore.

“The board of directors of the company at their meeting held on Tuesday, March 28, 2023 have approved the fifth interim dividend of ₹20.50 per equity share i.e., 2,050% on face value of ₹1 per share for the financial year 2022-23 amounting to ₹7,621 crore,” Vedanta said in a post market hour filing on Tuesday.

The record date for the purpose of payment of the dividend is April 07, 2023, it added.

Vedanta has a strong track record of paying hefty dividends to its shareholders. It has paid 39 dividends since July 23, 2001, while it declared an equity dividend amounting to ₹81 per share in the past 12 months, as per Trendlyne data. At the current share price of ₹274.25, this results in a dividend yield of 29.54%.

As per the latest shareholding pattern available on the BSE, the Agarwal family's Vedanta Resources holds a 69.69% stake in Vedanta, while retail and other investors own 11.4% shares in the company. Besides, domestic institutions and foreign institutions hold 9.82% and 7.9% stake in the mining major, while the remaining 1.19% stocks are owned by mutual funds. It is notable that Vedanta promoters have pledged 99.9% of its holding in the company to raise the money.

The metal and mining company, which operates iron ore, gold, and aluminium mines in Goa, Karnataka, Rajasthan, and Odisha, intends to use the dividend proceeds to repay its debt. The company had a consolidated debt of ₹53,581 crore and cash and cash equivalent of ₹32,612 crore for FY22.

In a separate development, Ajay Goel has resigned from the post of Acting Chief Financial Officer (CFO) and key managerial personnel of the company, effective from April 9, 2023.

Last week, the Vedanta-backed Hindustan Zinc declared its fourth interim dividend for its shareholders for the financial year 2022-23. The country’s largest zinc miner declared an interim dividend of ₹26 per equity share, amounting to ₹10,985.83 crore. The interim dividend is 1,300% of the face value of equity share of ₹2 each. It has paid 39 dividends since June 28, 2001, while it declared an equity dividend amounting to ₹49.50 per share in the past 12 months, as per Trendlyne data.