Hindustan Zinc, a Vedanta group company, is reportedly planning a special dividend of Rs 8,000 crore to its shareholders in the current fiscal year, PTI reported, citing sources.

The company’s board is expected to meet on Tuesday to approve the special dividend payment. The sources said that the total amount, approximately Rs 2,400 crore, or 30%, is projected to benefit the central government and contribute to its non-tax revenue for the fiscal year.

This special dividend comes in addition to the company’s regular annual dividend of around Rs 6,000 crore.

The move follows the National Company Law Tribunal’s (NCLT) recent approval for Hindustan Zinc to transfer Rs 10,383 crore from its general reserves to retained earnings.

Vedanta, which holds a 65% stake in Hindustan Zinc, will receive about Rs 5,100 crore from the special dividend. The company plans to use these funds to reduce its debt.

Vedanta is also preparing to sell up to a 3.31% stake in Hindustan Zinc through an Offer for Sale from August 16 to 19, with a floor price set at Rs 486 per share.

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Hindustan Zinc has seen steady growth in sales and balanced capital expenditure, leading to strong cash flow generation. The company expects this growth trajectory to continue and anticipates further incremental cash flows in the future.

For the fiscal year ending March 2024, Hindustan Zinc paid a total dividend of Rs 5,493 crore, with the government receiving Rs 1,622 crore for its 29.5% stake. In FY23, the company achieved a record dividend payout of around Rs 32,000 crore, including Rs 9,500 crore to the government.

During the June quarter, Hindustan Zinc’s market capitalisation surged to a record high of Rs 3.4 lakh crore, more than doubling as it added nearly Rs 1.6 lakh crore in value.