Anil Agarwal-led Vedanta Ltd on Monday cleared the third interim dividend of Rs 20 per share for the current financial year, pushing the total dividend payout for FY'25 to Rs 13,474 crore.
The board had earlier approved the second interim dividend of Rs four per equity share for 2024-25 amounting to Rs 1,564 crore on July 26. The company had approved the first interim dividend of Rs 11 per equity share for FY'25 amounting to Rs 4,089 crore on May 16.
This takes the total dividend for 2024-25 so far to Rs 13,474 crore.
"The board of directors of Vedanta Ltd at its meeting held today i.e. Monday, September 2, 2024, has considered and approved the third interim dividend of Rs 20 per equity share on face value of Rs 1 per equity share for the financial year 2024-25 amounting to Rs 7,821 crore," Vedanta Ltd said in a filing to BSE.
The record date for the said dividend payout would be September 10, the filing added.
During 2023-24, Vedanta, in aggregate had announced an interim dividend of Rs 29.5 per share amounting to Rs 10,966 crore for shareholders.
The diversified business model and efficiency in managing risks have helped Vedanta ensure regular flow of dividend as well as appreciation in capital for the investors. This has helped the company generate five-year total shareholding return and dividend yield of 276 percent and 65 percent, respectively as of June 30, 2024, according to Vedanta's investor presentation.
Sources had earlier said that Vedanta Ltd has readied a war chest of Rs 30,000 crore with its recent fund raises through qualified institutional placement (QIP), offer-for-sale (OFS) to pursue further deleveraging and growth.
This analyst says, "The Vedanta war chest can be used to accelerate deleveraging of the balance sheet, improve capital structure, the development of transformational projects- thereby paving ways to achieve its near-term target of USD 10-billion dollar EBITDA and pursuing inorganic opportunities".
Meanwhile, Vedanta continued to churn out healthy quarterly scores: For the quarter to June, profit after tax grew 54 per cent y-o-y and more than doubled on a sequential basis to Rs 5,095 crore.
At Rs 61,300 crore as of June 30, the debt of the mining major more than tripled.
The parent firm Vedanta Resources of Vedanta Ltd has targeted deleveraging as much as USD 3 billion debt in three years without expecting a rollover of loans.
The dividend payout by Vedanta Ltd will help its parent Vedanta Resources pare outstanding debt. This is the second dividend payout in two years aimed at paring debt after Vedanta Resources reduced nearly USD 4 billion of its debt in the last two years through a mix of dividend payments from the Indian subsidiary and by extending the maturity of its outstanding debt.
Now, it proposes to repay another USD 3 billion over three years, which would ease the liquidity and hence enable Vedanta Ltd. to deploy capital for a slew of expansion projects.
On the other hand, following the receipt of the no-objection certificate from secured lenders and the stock exchanges, the company is going ahead with its demerger by filing the Scheme with the National Company Law Tribunal (NCLT).
Being a mere vertical split, the demerger will enable it to unlock value and attract big-ticket investments for the expansion and growth of each of its demerged businesses.
The demerger will also further simplify its corporate structure into sector-focused independent businesses that afford investment opportunities to Indian and global investors, including sovereign wealth funds and strategic investors.
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