Suparjya Swain 
BHUBANEAWAR: Shares of Vedanta Ltd are expected to be in the spotlight on Tuesday morning following a significant dividend announcement by the company. Led by Anil Agarwal, Vedanta has declared a third interim dividend of Rs 20 per share for the financial year 2024-25 (FY25), amounting to a total of Rs 7,821 crore. The record date for this dividend has been set for Tuesday, September 10, 2024, and the payment will be made in accordance with regulatory timelines, the company confirmed.
This latest dividend declaration brings Vedanta’s total interim dividends for FY25 to Rs 35 per share. Earlier in the year, the company had already announced interim dividends of Rs 4 and Rs 11 per share, respectively.
In comparison, Vedanta declared a total dividend of Rs 10,959 crore or Rs 29.50 per share for FY24, translating to a dividend yield of 10.86 percent. For FY23, the dividend stood at Rs 101.50 per share, totalling Rs 37,572 crore, while FY22 saw the company distributing Rs 16,689 crore or Rs 45 per share. For FY21, Vedanta announced a total dividend of Rs 3,519 crore or Rs 9.50 per share.
The recent dividend announcements come amidst concerns about Vedanta Resources’ increasing debt levels. In response, Vedanta Resources has taken significant steps to improve its financial health, including selling a 2.7 percent stake in Vedanta and a 1.51 percent stake in Hindustan Zinc during the June quarter. Additionally, the company raised $1 billion through a qualified institutional placement (QIP), measures that are expected to enhance liquidity and financial flexibility. Analysts anticipate that these actions could lead to a reduction in high-cost borrowings, decreased interest outflows, and the release of pledged shares.
India Ratings recently upgraded Vedanta’s commercial paper (CP) rating and revised the Rating Watch to ‘Positive Implications’. This upgrade reflects the company’s enhanced liquidity and financial flexibility, supported by funds raised through stake sales and the QIP completed in July 2024. The ratings agency noted that Vedanta’s improved liquidity position is facilitating deleveraging at both Vedanta Resources Limited (VRL) and Vedanta Ltd (VDL), thus enabling the repayment of high-cost debt and lowering interest outflows. However, VRL will continue to rely on Vedanta’s cash flows for debt repayment and timely refinancing.
In a related development, Hindustan Zinc, in which Vedanta holds a 64.92 percent stake, recently announced a second interim dividend of Rs 19 per equity share for FY24-25. This amounts to Rs 8,028.11 crore, of which Vedanta is expected to receive Rs 5,212 crore in dividend payments.
