Hindustan Zinc (HZL), in which mining major Vedanta (VEDL) holds a majority stake, has declared an interim dividend of Rs 6 a share for FY24, amounting to a total outgo of Rs 2,535.19 crore. Following the issuance of dividend, VEDL will get Rs 1,645 crore in lieu of the 64.92% stake it holds in HZL.
The record date for the payment of dividend is December 14, 2023, HZL said in a regulatory update.
This is the second interim dividend announced by the company for the fiscal year. Earlier in July, HZL announced an interim dividend of Rs 7 per share for FY24 — the first payout for FY24 — with a total outgo of Rs 2,957.72 crore. The company had declared a total dividend of Rs 75.5 per share in the previous financial year, with a total outgo of Rs 31,901 crore.
The dividend of Rs 6 per share is below the Rs 7 announced in July, and much lower than Rs 26 announced in March and Rs 13 in January.
The government holds a 29.54% stake in VEDL, which was privatised more than two decades ago, and the remaining is held by public shareholders.
The issuance of the dividend comes at a time when VEDL and its parent London-headquartered Vedanta Resources (VRL) were seeking to shore up funds to trim debt.
A report by Motilal Oswal last month pegged VEDL’s debt at Rs 9,000 crore and that of VRL at about $1 billion coming up for refinancing in the fourth quarter. VRL has $3.1 billion of debt maturing in FY25, including $2 billion bonds.
In September, HZL initiated a restructuring exercise to create three separate legal entities and authorised a committee of directors to evaluate the proposal. The company is exploring options to demerge its three business verticals – zinc & lead, silver and recycling – to help it capitalise on “distinct market positions” and attract investors, HZL had said in a regulatory update.
On Wednesday, HZL’s – a producer of zinc, lead and silver – share prices ended up 0.28% at Rs 325.80 and that of VEDL closed up 2.97% at Rs 249.55 on the BSE.