December 6, 2023
New Delhi, India
Interim Dividend
In a recent development, Hindustan Zinc declared its second interim dividend of Rs 6 per share for the current financial year. This decision holds significant implications, especially for Vedanta, which owns a majority stake in Hindustan Zinc.
Dividend Details
Hindustan Zinc’s board approved a dividend of 300 percent on the face value of Rs 2 per share, amounting to Rs 2535.19 crore for FY 2023-24. This marks the lowest dividend payout by the company since 2018, following the earlier announcement of a Rs 7 interim dividend in July.
Vedanta’s Share: With Vedanta holding a 64.92% stake in Hindustan Zinc, the company is set to receive about Rs 1,645 crore from the total dividend outgo. This comes at a crucial time for Vedanta as it faces debt repayments worth $1 billion in January 2024.
Record Date and Eligibility: Shareholders looking to benefit from the second interim dividend must ensure they hold shares on the record date, fixed as December 14, 2023.
Stock Performance: The announcement has already impacted Hindustan Zinc’s stock positively, with shares up nearly 2% in mid-week trading at 330.75. The stock has turned positive for the year and is up 1.5% in 2023.
Debt Repayment Concerns: The timing of the dividend announcement, the record date, and Vedanta’s debt repayment deadline in January 2024 raises questions about the strategic decisions the company might make. Vedanta Chairman Anil Agarwal stated that all options are open regarding debt repayments.
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Conclusion:
As Hindustan Zinc navigates its dividend strategy, Vedanta finds itself at a crucial juncture with financial decisions holding the key to its debt repayment commitments in the coming months.
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