Hindustan Zinc plans ₹8,000 crore special dividend, promoter Vedanta may get ₹5,100 crore for de-leveraging

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Hindustan Zinc plans ₹8,000 crore special dividend, promoter Vedanta may get ₹5,100 crore for de-leveraging

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August 15, 2024

Hindustan Zinc plans ₹8,000 crore special dividend, promoter Vedanta may get ₹5,100 crore for de-leveraging

Aug 15, 2024 04:51 PM IST

This special dividend will be over and above the regular dividend of around ₹6,000 crore, which Hindustan Zinc doles out every year

Vedanta group firm Hindustan Zinc Ltd (HZL) plans to dole out a special dividend payout of ₹8,000 crore to its shareholders in the current fiscal, according to sources.

32,000 crore, with the government getting a whopping ₹9,500 crore.” title=”In FY22-23, the company made a record dividend payout of around ₹32,000 crore, with the government getting a whopping ₹9,500 crore.”>

In FY22-23, the company made a record dividend payout of around ₹32,000 crore, with the government getting a whopping ₹9,500 crore.

HZL’s board is likely to meet on Tuesday to consider and approve the special dividend payment for this fiscal, they said.

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“Of this, around 30 per cent or ₹2,400 crore may go to the Centre contributing to its non-tax revenues for the fiscal,” sources in the know of the development said.

The move follows the National Company Law Tribunal’s (NCLT) approval to transfer ₹10,383 crore of general reserves to its retained earnings.

This special dividend will be over and above the regular dividend of around ₹6,000 crore, which HZL doles out every year.

Apart from the government, this will also benefit promoter Vedanta Ltd, which holds around 65 per cent stake in HZL, and will receive around ₹5,100 crore, which it may use to further de-leverage its balance sheet.

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Vedanta will also be selling up to a 3.31 per cent stake in HZL through the Offer for Sale issue from August 16 to 19. It has set the floor price at ₹486 per share.

HZL has benefitted from steady growth in sales volume and balanced capital expenditure for continuing operations, creating a strong track record of generating cash flows. The company said in its scheme of arrangement filed with the NCLT that it expects the growth trajectory to continue and its business operations will keep generating incremental cash flow over the coming years.

In the last financial year ended March 2024, Hindustan Zinc had paid a total dividend of ₹5,493 crore, of which the government received ₹1,622 crore against its 29.5 per cent stake in the company.

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In FY22-23, the company made a record dividend payout of around ₹32,000 crore, with the government getting a whopping ₹9,500 crore.

During the June quarter, Hindustan Zinc’s market capitalisation more than doubled as it added almost ₹1.6 lakh crore. In fact, the company touched its highest-ever market cap of ₹3.4 lakh crore during the quarter.

This special dividend will be over and above the regular dividend of around ₹6,000 crore, which Hindustan Zinc doles out every year

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