Shares of Vedanta Ltd are in focus on Thursday morning after the Anil Agarwal-led company said its board would consider fourth interim dividend for FY25 on Tuesday, October 8. Vedanta has fixed Wednesday, October 16, as record date for the purpose of determining the entitlement of the equity shareholders for the said dividend, if declared.
To recall, Vedanta recently declared the third interim dividend of Rs 20 per share for FY25, with September 10 as the record date. It earlier announced interim dividends of Rs 4 per share and Rs 11 per share, respectively. With this, Vedanta has already announced dividends worth Rs 35 per share for FY25. Promoters owned 56.38 per cent stake in Vedanta as on June 30.
Pormoter Vedanta Resources' has its income largely comprising of dividends and brand fee from Vedanta, which are used for principal and interest servicing.
In a recent note, ICRA said VRL’s repayments continue to be sizeable in the upcoming fiscals. While, the current year repayment obligations have been addressed through the fund raised from the stake sale in Vedanta and the likely higher dividend outflow by Vedanta, the repayment remains sizeable at $800 million in FY2026 and the cash flow deficit post Vedanta's support would require refinancing, thus exposing VRL to refinancing risks.
"However, the group has taken steps to deleverage VRL’s long-term debt, expected at $4.6 billion in FY2025 from ~$9.1 billion in FY2022, which ICRA believes is expected to reduce further in the medium term. Further, the recent efforts to refinance the high-cost bonds would mitigate the refinancing risk to an extent," the ratings agency said.
Vedanta had declared a total of Rs 10,959 crore or Rs 29.50 per share dividend in FY24. The dividend yield stood at 10.86 per cent. It announced Rs 101.50 per share dividend in FY23, amounting to Rs 37,572 crore. In FY22, Vednata shared Rs 16,689 crore or Rs 45 per share dividend with shareholders. FY21 saw Vedanta announcing a total dividend of Rs 3,519 crore or Rs 9.50 per share dividend.
Vedanta Resources sold 2.7 per cent stake in Vedanta in the June quarter. It also offloaded 1.51 per cent stake sale in Hindustan Zinc. Besides, it raised $1 billion from qualified institutional placement recently, which analysts said could lead to an improvement in liquidity and financial flexibility. The moves are seen positive, as they may help retire high-cost borrowing, resulting in lower interest outflow and release of pledged shares.