Vedanta shares gain 3% after announcement of 2050% dividend payout

Nifty index heads for correction

Following the announcement that a fifth dividend would be paid for the fiscal year 2022–23 that ends on Friday, shares of Vedanta Ltd., the business headed by billionaire Anil Agarwal, increased by about 3% on Wednesday.

According to a statement with the stock exchange on Tuesday, the business will pay an interim dividend of 20.50 rupees per share, or 2050 percent of the face value of one rupee, for a total of 7,621 crore rupees. The statement stated, “The record date for purposes of payment of the dividend is Friday, April 07, 2023.”

Following the news, CRISIL downgraded the outlook on Vedanta’s non-convertible debentures and long-term bank facilities to “negative” from “stable,” joining a select group of other international rating agencies.

With a decreasing ratio of cash surplus to one-year maturities for FY23 and FY24, it was said that the change in outlook reflected the risk of higher-than-expected financial leverage and less financial flexibility.

This is because Vedanta is paying out more money in dividends to pay off significant maturing debt obligations at its parent firm, Vedanta Resources Ltd (VRL), than it is taking in. CRSIL declared.

The resignation of Vedanta’s interim chief financial officer Ajay Goel, effective as of April 9, negated the announcement of the dividend payout because it came at a time when concerns about the group’s mounting debt were being voiced.


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