Vedanta Limited, backed by billionaire Anil Agarwal, is in focus as it prepares to go ex-dividend for its second interim dividend of FY24 on December 27, 2024. The dividend payout of ₹11 per share represents a remarkable 1,100% return on a face value of ₹1, totaling approximately ₹4,089 crore for shareholders. Known for its hefty dividend history, Vedanta now boasts a dividend yield of 39.08%, one of the highest in the Indian market.
Despite these attractive payouts, Vedanta’s stock has had a mixed performance this year, with an 18% decline year-to-date. Last Friday, it closed at ₹259.75 on the BSE, and while it gained 11% over the past month, concerns about its parent company, Vedanta Resources Limited (VRL), have weighed on investor sentiment. VRL’s heavy debt load has drawn attention, especially after a recent downgrade by S&P Global Ratings to ‘CC’ on bonds maturing between 2024 and 2026. S&P’s report noted that the private credit facility of $750 million takes priority over dividends from asset sales, meaning cash flow will first go toward this debt before reaching bondholders.
Vedanta’s business structure is set for a major change. In October, the board approved a demerger plan to split Vedanta into six independently listed companies by FY25, aiming to attract new investments in areas such as metals, oil and gas, power, and its recent entry into semiconductors and display glass. This restructuring is intended to unlock value, yet analysts remain split on whether it will adequately address VRL’s debt issues.
With a unique asset portfolio that spans diverse sectors, including metals (zinc, silver, lead, aluminum), oil, traditional ferrous metals (iron ore, steel), coal, renewable energy, and its expansion into semiconductors, Vedanta’s dividend and restructuring decisions make it a stock to watch as the year closes.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.
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