Hindustan Zinc clarifies on report of Rs 8,000-crore special dividend payout, says 'unable to comment'

The news agency's sources also revealed that about 30 percent of the special dividend, equivalent to Rs 2,400 crore, will be allocated to the government, contributing to its non-tax revenues for the fiscal year.

Hindustan Zinc Ltd (HZL), a subsidiary of the Vedanta Group, plans to make a special dividend payout of Rs 8,000 crore to its shareholders for the current fiscal year, PTI reported on August 15 citing its sources. A board meeting is scheduled for August 20 to finalize the approval of this special dividend.

The special dividend follows the recent approval by the National Company Law Tribunal (NCLT) to transfer Rs 10,383 crore from general reserves to retained earnings. This move will be in addition to the company’s regular annual dividend of approximately Rs 6,000 crore.

The news agency's sources also revealed that about 30 percent of the special dividend, equivalent to Rs 2,400 crore, will be allocated to the government, contributing to its non-tax revenues for the fiscal year. "Of this, around 30 per cent or Rs 2,400 crore may go to the Centre contributing to its non-tax revenues for the fiscal," PTI stated quoting its sources.

The company in an exchange filing said,"we wish to clarify that we are unable to comment on media speculation / rumors. It may be noted that Company vide its intimation dated August 14, 2024 has informed that a meeting of the Board of Directors of the Company is scheduled to be held on Tuesday, August 20, 2024 to consider and approve the second interim dividend on equity shares, if any, for the financial year 2024-25."

The government which holds a 29.5 percent stake in Hindustan Zinc will receive this payout alongside other shareholders.

Promoter Vedanta Ltd, which owns around 65 percent of HZL, stands to gain approximately Rs 5,100 crore from the special dividend. This amount is expected to be used by Vedanta to further reduce its balance sheet leverage.

In addition to the dividend payout, Vedanta plans to sell up to a 3.31 percent stake in HZL through an Offer for Sale (OFS) issue, scheduled from August 16 to 19. The floor price for the OFS has been set at Rs 486 per share.

(With PTI inputs)