Vedanta Shares Jump Nearly 4% Ahead Of First Dividend After Demerger, Will Investors Still Get Big Payouts?
Mumbai: Shares of Vedanta jumped nearly 4 per cent on Tuesday after the Anil Agarwal-led metals major fixed October 14 as the record date for its prospective first interim dividend for FY27. The company's board is scheduled to meet on October 8 to consider and approve the dividend. The announcement has drawn attention as it will be Vedanta's first dividend decision following its major demerger.…
Vedanta shares surged nearly 4% on Tuesday following the company's announcement of its first interim dividend following the demerger. Anil Agarwal's metals giant set October 14 as the record date for shareholders to receive the dividend, pending board approval. This marks Vedanta's first dividend decision since its split into five separate entities last June.
The stock was trading at Rs 264.90 on the NSE at 1:59 pm IST on October 6, up 3.86% from the previous close of Rs 255.05. The intraday high was Rs 265.50, while the low was Rs 256.60. Vedanta's market cap stands at around Rs 1.03 lakh crore, with a price-to-earnings ratio of 5.29. Its 52-week trading range was between Rs 167.62 and Rs 360.
Those eligible for the payout must own Vedanta shares by October 13, under the T+1 settlement system. The company has a track record of rewarding shareholders, having declared 49 dividends since 2001. Earlier this year, Vedanta paid an interim dividend of Rs 11 per share in March, with earlier dividends in August and June totaling Rs 16 and Rs 7 per share, respectively.
The upcoming dividend is particularly noteworthy as it will be the first after Vedanta's demerger. The five spun-off companies are Vedanta Aluminium Metal, Vedanta Power, Vedanta Oil and Gas, Vedanta Iron and Steel, and the remaining businesses under the original Vedanta. Sunny Agrawal, Head of Fundamental Research at SBI Securities, expects residual Vedanta's dividend per share to decline, as large cash-generating businesses have been separated.
The future payouts will likely hinge on the earnings of Vedanta's 60.71% stake in Hindustan Zinc, a major zinc and silver producer. Commodity prices, especially zinc and silver, will play a crucial role in determining the future dividends. While improved capital allocation across independent companies could support shareholder returns, analysts anticipate dividends to become more business-specific and potentially more volatile.
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