Vedanta shares in focus after Rs 4,089 crore dividend announcement; record date, history & more

Shares of Vedanta Ltd will be in focus on Tuesday morning after the Anil Agarwal-led company announced a second interim dividend of Rs 11 per share for FY24, amounting to Rs 4,089 crore. Vedanta said the record date for the purpose of payment of dividend will be Wednesday, December 27. The interim dividend, Vedanta said, would be duly paid within the stipulated timelines as prescribed under law.

"We wish to inform you that the Board of Directors of the Company, in its meeting held today i.e., on Monday, December 18, 2023, has approved the Second Interim Dividend of ₹ 11/- per equity share i.e. 1100% on face value of ₹ 1/- per equity share for the Financial Year 2023-24 amounting to c. ₹ 4,089 Crores," Vedanta said in a BSE filing.

Earlier this year, Vedanta's board of directors, through a resolution passed by circulation on May 22, approved the first interim dividend on 18.50 per equity share, i.e., 1,850 per cent for FY2023-24. It turned ex-dividend on May 30. Before this, Vedanta shares turned ex-dividend in April (Rs 20.50 per share) and Ferbuary (Rs 12.50 per share). The quantum of dividend outgo by Vedanta has climbed in the last few years.

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Vedanta's total dividend for FY23 amounted to Rs 37,572 crore. The metals & mining company declared a dividend of Rs 16,689 crore in FY22. This was far higher than the dividend outgo of Rs 3,519 crore in FY21. The sharp rise in dividend payments have been seen amid concerns over persisting delays in the refinancing of Vedanta parent Vedanta Resources' (VRL) debt, which are due to mature in coming months. The Vedanta stock is down 17.56 per cent year-to-date.

Shareholding data suggests promoters ownership in Vedanta stood at 63.71 per cent stake at the end of September quarter. Recently S&P Global Ratings said Vedanta Resources' proposed liability management exercise involving $3.2 billion dollar-denominated bonds is a distressed transaction, adding that it could downgrade the Vedanta parent's to 'SD' (selective default) if the company completes the transaction. "We could also lower the ratings on the company's three bonds to 'D' in that event," S&P Global Ratings said.

Vedanta Resources is looking to address the three bond maturities using a mix of cash and new bonds and is expected to exchange about half of the January 2024 bond with new bonds maturing in January 2027, and most of the August 2024 and March 2025 bonds with new amortising bonds maturing in December 2028.