Vedanta pledges 95% holdings in Hindustan Zinc to raise funds

Mining major Vedanta, a subsidiary of London-headquartered Vedanta Resources, has pledged almost 95% of its holdings in Hindustan Zinc (HZL), including a pledge three days ago.

The company pledged 139.4 million shares or 3.31% on Monday, following 183.8 million shares or 4.34% in April. This takes the total number of pledged shares to 2.73 billion, or 95.24% of HZL’s total shares held by Vedanta, stock exchange data showed.

This is an increase from 87.59% shares pledged to raise funds. As of March 31, as many as 2.40 billion shares or 87.59% of Vedanta holding in HZL were pledged, with promoters holding 2.74 billion or 64.92% of the total 4.3 billion shares of HZL.

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The move comes at a time when its parent Vedanta Resources is shoring up funds to trim debt.

In March, Vedanta had approved its fifth interim dividend of Rs 20.50 per share or a total of Rs 7,621 crore for FY23. With this, the total outgo by way of dividends for FY23 was about Rs 37,733 crore.

Vedanta holds a 64.92% stake in HZL, which was privatised more than two decades ago, while the Indian government holds 29.54% .

On April 20, Vedanta pledged 2.44% in HZL to raise Rs 1,500 crore. The pledge by the Anil Agarwal-helmed company, totalling 103.24 million shares, was as a security for a term loan the company had raised. With this itself, Vedanta had pledged 91.35% of its stake in HZL. Prior to this, on December 5, 2022, Vedanta had pledged 1% to SBICap Trustee Company.

On April 13, Vedanta’s board had approved raising up to Rs 2,100 crore through issuance of Non-Convertible Debentures (NCDs) through private placements. The NCDs were to be raised in one or more tranches.

On Tuesday, Vedanta approved its first interim dividend of Rs18.50 per share for FY24, with the total outgo amounting toRs 6,877 crore and set May 30 as the record date.

Prior to this, on April 6, the Mumbai-headquartered company had announced an interim dividend of Rs 20.50, increasing its FY23 dividend payout to Rs 101.50 a share.

For the quarter ended March 31, HZL posted a 11.7% fall in consolidated net profit to Rs 2,583 crore, impacted by rising commodity prices, against net profit of Rs 2,928 crore in the same period a year ago.