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Vedanta announces interim dividend of Rs 9.5 per share aggregating to Rs 3,500 crore

Mumbai: Metals and mining conglomerate Vedanta Ltd on Saturday announced an interim dividend of Rs 9.50 per equity share, which amounts to a total sum of Rs 3,500 crore.

“We wish to inform you that the Board of Directors of the Company through resolution passed by circulation on Saturday, October 24, 2020 have approved First Interim Dividend of ? 9.50 per equity share,” the company said in the BSE filing.

The record date for the purpose of payment of dividend is Saturday, October 31, 2020. The interim dividend will be paid within stipulated timelines as prescribed under law, the company said.

The company retained the dividend proceeds received from its subsidiary, Hindustan Zinc Ltd and did not pass on the amount equivalent to Rs 4,500 crore in May. Vedanta holds 64.9% stake in Hindustan Zinc.

Last week, Hindustan Zinc declared an interim dividend of Rs 21.3 per share, and the record date for paying the same falls on October 28th.

Analysts were estimating a dividend payout of at least Rs 15 a share from Vedanta Ltd.

“Vedanta continuing to upstream HZL’s entire dividend would lead to a Rs15.7 per share dividend. However, it did not pay out HZL’s dividend in 4Q20, but rather approved a US$ 1bn inter-company loan to parent VRL,” CLSA said in its recent sector report.

Vedanta’s capital allocation policy will be key for stock re-rating, the report added.

At the end of FY 20 the company had a cash balance of Rs 37, 912 crore. The company has paid a dividend of Rs 18.85 per share during FY19 and an interim dividend of Rs 3.90 in FY 20 of Rs 1,450 crores.

On 10th of October, Vedanta Ltd announced its voluntary delisting offer to the exchanges to gain the balance shareholding for the purpose of restructuring the company, however it had failed at the reverse book building process.

Promoters of the company required 1.34 billion shares to successfully delist from exchanges. However during the process the company saw only 1.26 billion confirmed bids.

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