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Published: September 3, 2024
Updated: September 3, 2024

Vedanta Shares Soar as Company Announces Whopping Rs 7,821 Crore Dividend

Dividend Delight

Vedanta Ltd has announced a third interim dividend of Rs 20 per share for the financial year 2024-25, taking the total dividend announced so far to Rs 35 per share. This move is expected to put a smile on the faces of investors, especially after the company's earlier announcements of interim dividends of Rs 4 per share and Rs 11 per share.

A Look at Vedanta's Dividend History

Vedanta has a history of rewarding its shareholders with generous dividends. In FY24, the company declared a total dividend of Rs 10,959 crore or Rs 29.50 per share. In FY23, it announced a dividend of Rs 101.50 per share, amounting to Rs 37,572 crore. Similarly, in FY22, Vedanta shared Rs 16,689 crore or Rs 45 per share dividend with shareholders.

Improving Financial Flexibility

The dividend announcement comes at a time when Vedanta is working to improve its financial flexibility. The company has sold stakes in its subsidiaries, including Hindustan Zinc, and raised $1 billion through a qualified institutional placement. These moves are expected to help retire high-cost borrowing, resulting in lower interest outflow and release of pledged shares.

Ratings Upgrade

India Ratings has upgraded Vedanta's commercial paper rating and revised Rating Watch to 'Positive Implications', citing its improved liquidity and financial flexibility. The ratings reflect Vedanta's ability to raise funds through stake sale and the QIP completed in July 2024.

Demerger Plans

Vedanta is also looking to demerge into six separate listed standalone entities with Vedanta Resources as the holding company. The demerger has been admitted under the NCLT and is expected to be complete in the next two-to-three quarters.

Vedanta's dividend announcement is a positive move for investors, and the company's efforts to improve its financial flexibility are expected to yield benefits in the long run. With a history of generous dividends and a plan to demerge into separate entities, Vedanta shares are likely to remain in focus in the coming days.