Hindustan Zinc Ltd (HZL), a company under the Vedanta Group, is planning a special dividend payment of Rs 8,000 crore to its shareholders this financial year, sources say. HZL’s board is expected to meet on Tuesday to approve this payout.
Around 30% of this amount, or Rs 2,400 crore, could go to the Indian government, helping with non-tax revenues for the fiscal year, according to sources.
This special dividend comes after the National Company Law Tribunal (NCLT) allowed HZL to transfer Rs 10,383 crore from its general reserves to retained earnings. It will be in addition to HZL’s regular dividend of about Rs 6,000 crore, which the company usually gives out annually.
Vedanta Ltd, the promoter holding 65% of HZL, will benefit from this payout, receiving about Rs 5,100 crore. Vedanta may use this money to reduce its debts. Additionally, Vedanta is selling up to 3.31% of its stake in HZL through an Offer for Sale (OFS) from August 16 to 19, with the share price set at Rs 486 each.
HZL has consistently grown its sales and balanced its spending, creating a strong cash flow. In its filing with NCLT, the company said it expects this growth to continue in the coming years.
Last year, Hindustan Zinc paid a total dividend of Rs 5,493 crore, of which Rs 1,622 crore went to the government, which owns a 29.5% stake in the company. In the previous year (FY22-23), the company made a record dividend payout of Rs 32,000 crore, giving the government Rs 9,500 crore.
During the June quarter, Hindustan Zinc’s market value doubled, adding Rs 1.6 lakh crore, with its market cap reaching an all-time high of Rs 3.4 lakh crore.
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