Vedanta Sets Third Interim Dividend at Rs 20/Share, Total FY25 Payout Hits Rs 13,474 Cr

Vedanta Ltd, led by Anil Agarwal, approved a third interim dividend of Rs 20 per share for the current financial year. This brings the total dividend payout for FY25 to Rs 13,474 crore. The board had previously approved a second interim dividend of Rs 4 per share on July 26, amounting to Rs 1,564 crore. On May 16, the first interim dividend of Rs 11 per share was approved, totalling Rs 4,089 crore.

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The board meeting held on Monday, September 2, 2024, confirmed the third interim dividend of Rs 20 per equity share with a face value of Rs 1 per share for FY25. This amounts to Rs 7,821 crore. The payment date for this dividend is set for September 10, as stated in Vedanta Ltd's filing to BSE.

Dividend History and Investor Returns

In the previous financial year, Vedanta declared a total interim dividend of Rs 29.5 per share, amounting to Rs 10,966 crore. This consistent dividend flow and capital appreciation have generated a five-year total shareholder return and dividend yield of 276% and 65%, respectively, as of June 30, 2024.

Vedanta Ltd has also raised significant funds through qualified institutional placement (QIP) and offer-for-sale (OFS), creating a war chest of Rs 30,000 crore. These funds are intended for deleveraging and growth initiatives.

Financial Performance and Debt Reduction

The company reported strong quarterly numbers with profit after tax growing by 54% year-on-year in the first quarter. The profit more than doubled on a quarter-on-quarter basis to Rs 5,095 crore. As of June 30, Vedanta's debt stood at Rs 61,300 crore.

Vedanta Resources, the parent firm of Vedanta Ltd, plans to reduce its debt by USD 3 billion over the next three years. This follows a reduction of nearly USD 4 billion in the past two years through dividends from its Indian subsidiary and extending debt maturity.

Demerger Plans and Future Investments

The company is progressing with its demerger plans after receiving no-objection certificates from secured lenders and stock exchanges. The scheme has been filed with the National Company Law Tribunal (NCLT). The demerger aims to create sector-focused independent businesses that will attract investment from Indian and global investors.

This strategic move will unlock value and support expansion projects across its demerged businesses. Simplifying its corporate structure will also provide investment opportunities for sovereign wealth funds and strategic investors.

The dividend payouts by Vedanta Ltd will aid its parent company in reducing outstanding debt. This will improve liquidity and allow Vedanta Ltd to allocate capital towards various expansion projects.

Analysts suggest that Vedanta may use its war chest for accelerated deleveraging and improving its capital structure. This would support transformational projects aimed at achieving a near-term USD 10-billion EBITDA target and pursuing inorganic growth opportunities.

Vedanta continues to demonstrate strong financial performance and strategic planning. The company's efforts in debt reduction and corporate restructuring are expected to enhance shareholder value and attract significant investments.