Vedanta shares jump 2% ahead of dividend announcement

Shares of Vedanta rose as much as 2% in intraday trade on Monday amid strong volume trade ahead of dividend announcement for the financial year 2023-24. The meeting of the board of directors of the company is scheduled today to consider and approve the first interim dividend on equity shares for FY24. The company has fixed May 30, 2023, as the record date for the purpose of determining the entitlement of the equity shareholders for the same dividend.

Ahead of the board meeting, Vedanta shares opened 0.5% higher at ₹283.5 against the previous closing price of ₹282 on the BSE. During the session, the mining stock surged as much as 2.1% to hit an intraday high of ₹287.90, while the market capitalisation rose to ₹1.07 lakh crore.

Finally, the stock settled at ₹287.30, up 1.88% on the BSE, with 11.75 lakh shares changing hands over the counter as compared to two-week average volume of 4.75 lakh stocks.

At the current price level, the stock trades 39% higher than its 52-week low and 15.7% lower than its 52-week high. The counter touched its 52-week high and low of ₹340.75 on January 20, 2023, and ₹206.10 on July 1, 2023.

In the financial year 2023, Vedanta declared a total dividend of ₹101.50 per share, which amounted to ₹37,730 crore, the highest ever by the mining tycoon Anil Agarwal-led company. The metal and mining major declared five interim dividends in FY23- ₹31.50 in May, ₹19.50 in June, ₹17.50 in November, ₹12.50 in February, and ₹20.50 in March.

Vedanta has a strong track record of paying hefty dividends to its shareholders. It has paid 40 dividends since its listing in July 2001, as per Trendlyne data. At the current share price, the dividend yield stands at 24.37%.

As per the latest shareholding pattern available on the BSE, the Agarwal family's Vedanta Resources holds a 69.69% stake in Vedanta, while retail and other investors own 11.4% shares in the company. Besides, domestic institutions and foreign institutions hold 9.82% and 7.9% stake in the mining major, while the remaining 1.19% stocks are owned by mutual funds. It is notable that Vedanta promoters have pledged 99.9% of its holding in the company to raise the money.

The metal and mining company, which operates iron ore, gold, and aluminium mines in Goa, Karnataka, Rajasthan, and Odisha, is likely to use the dividend proceeds to repay its debt. As of March 31, 2023, the company had a gross debt of ₹66,182 crore and net debt of ₹45,260 crore. The cash and cash equivalents position stood at ₹20,922 crore.

For Q4FY23, Vedanta reported a 67.5% year-on-year drop in its net profit at ₹1,881 crore, while revenue from operations dropped 5.4% YoY to ₹37,225 crore.