Shares of Vedanta Ltd will be in focus on Thursday morning after the Anil Agarwal-led company said its board would consider and approve second interim dividend for the ongoing financial year on Monday, December 18. Vedanta said, if approved, the record date for the dividend would be Wednesday, December 27. Vedanta had earlier in May declared its first interim dividend of Rs 18.50 per share. The stock had turned ex-dividend on May 30.
On Wednesday, the Vedanta stock closed at Rs 253.20 on BSE, up 2.63 per cent. The scrip is down 19.9 per cent year-to-date. The dividend outgo by Vedanta has surged in the last few years. In FY23, it paid a total dividend of Rs 37,572 crore. Vedanta declared Rs 16,689 crore in divided in FY22 and Rs 3,519 crore in FY21.
There has been concerns over possible delays in refinancing of the upcoming debt maturities of the parent company, Vedanta Resources (VRL), beyond the expected timelines. Promoters owned 63.71 per cent stake in India listed Vedanta Ltd.
On Thursday, a report by the ET suggested that the Vedanta parent has launched a liability management exercise to restructure repayments of around $3.8 billion on bonds, which are set to mature over the next three years. This is after it secured funds from a bank and private credit funds. The conglomerate is providing bondholders with options to extend maturities and partially prepay three bonds, the ET report suggested.
Also read: Vedanta shares in focus as CRISIL downgrades rating on bank loan facilities; here's what it says
Crisil had last month downgraded its long-term rating on Rs 56,263.50-crore debt instruments and bank loan facilities of the Vedanta Ltd amid an "increased likelihood of Vedanta’s consolidated financial leverage (ratio of net debt-to-Ebitda) for the current fiscal remaining higher than the rating thresholds of 2.7 times."
The rating agency suggested that Vedanta’s consolidated operating profitability for the ongoing financial year could be around Rs 35,000 crore against Rs 35,250 crore in FY23. "This will be supported by continued benefit of reduced cost pressure and healthy operating rates across key business segments, along with recent gains from arbitration award in oil & gas business, despite commodity prices remaining modest and slower than expected progress on capex plans in aluminium business," it said last month.
Besides, it noted that completion of Vedanta's plans to deleverage its balance-sheet through asset monetisation was also running behind timelines. "The delay in refinancing at VRL reduces the financial flexibility for Vedanta, which had already witnessed a reduction in liquidity since last fiscal," it suggested.
Vedanta Resources, Crisil last month noted, was in process of refinancing its bonds maturing in January 2024 ($1 billion), August 2024 ($0.95 billion) and March 2025 ($1.2 billion), which can potentially reduce the refinancing pressure on VRL, "thereby reducing the need for significantly large annual dividend payouts by Vedanta over the medium term."
Also read: Adani Ports shares rise 169% from 52-week low; can they breach record high?