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Vedanta lines up this year's 5th interim dividend; CRISIL downgrades outlook to 'negative'

Vedanta's fifth interim dividend for this year is worth Rs 7,621 crore.

March 29, 2023 / 12:15 PM IST
Vedanta announces fifth interim dividend

Vedanta announces fifth interim dividend

The board of Vedanta Ltd. announced payment of the fifth interim dividend for this year on March 28. The board of the Anil Agarwal-led company said it will pay a dividend of Rs 20.50 per equity share, amounting to a total of Rs 7,621 crore.

It said in an exchange filing that the Board has approved the fifth interim dividend of Rs 20.50 per equity share, which is 2050 percent on the face value of Rs 1 per share for the financial year 2022‐23 amounting to Rs 7,621 crore. “The record date for the purpose of payment of the dividend is Friday, April 07, 2023,” it added.

Following the announcement, rating agency CRISIL on March 29 revised outlook on the company's term loans and debentures from 'stable' to 'negative'. The change in outlook reflects the possibility of higher-than-expected financial leverage and lower financial flexibility with reducing ratio of cash surplus to one-year maturities for FY23 and FY24, it said.

Also read: Vedanta: Higher dividend payout likely to continue in the short term

"This is due to increased cash outflow from Vedanta, in the form of dividends, towards large maturing debt obligations at its parent company Vedanta Resources Ltd (VRL)." CRISIL stated.

CRISIL reaffirmed the rating 'AA' for long term loans and debentures and ‘A1+’ rating on the commercial paper and short-term bank facilities.

"The board of directors of the company is proposed to be scheduled on March 28 to consider and approve the fifth interim dividend on equity shares, if any, for the Financial Year 2022-23," Vedanta had said in a regulatory filing.

At 12:12 pm, the shares of Vedanta were trading at Rs 280.20 apiece, 2.2 percent higher than the previous close, on the NSE.

Earlier in March, a report stated that mining mogul Agarwal is contemplating a stake sale in Vedanta and is examining the possibility of selling less than 5 percent of the company.

However, soon after the report, Vedanta termed any such talks of stake sale in oil-to-metals conglomerate as 'untrue and baseless'. According to the company's spokesperson, "Any talk of stake sale in Vedanta Ltd is untrue and baseless." The media report had said that a stake sale in Vedanta is a last resort for Agarwal and will only be considered if other fundraising options fail.

Vedanta Resources which is a majority shareholder of Vedanta Ltd has been looking to reduce its debt through the sale of its zinc assets for a cash consideration of $2,981 million to Hindustan Zinc Ltd (HZL). However, the government which holds a 29.54 percent stake in Hindustan Zinc has sternly opposed this move. Vedanta holds 64.92 percent of the equity share capital of HZL.

A week ago, Hindustan Zinc Ltd had announced its fourth interim dividend of Rs 10,985.83 crore to its shareholders.

Moneycontrol News
first published: Mar 28, 2023 06:08 pm