InvestorQ : How much will Vedanta benefit from the latest dividend declaration by Hindustan Zinc and what is the fate of the delisting plan?
vaishnavi mhatre made post

How much will Vedanta benefit from the latest dividend declaration by Hindustan Zinc and what is the fate of the delisting plan?

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vidhya Laxmi answered.
1 month ago
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On 20 October, when announcing its results, Hindustan Zinc also announced record dividends of Rs. 21.30 per share. This is the highest ever dividend paid by HZL to shareholders. Hindustan Zinc is a majority owned subsidiary of Vedanta Ltd.

Currently, Vedanta owns 274.31 crore shares of HZL representing 64.92% in the company. As of now the government has not allowed to merge HZL into Vedanta and use its cash reserves so the only option is to pay out hefty dividends to itself.

Considering its current ownership of nearly 65% in HZL, the total dividend payout of Rs.9000 crore will translated into Rs.5500 crore. Most analysts expect this to be favorable to the price of Vedanta and traders can see some appreciation in Vedanta. But the issue is larger.

The total dividend payout by HZL is to the tune of Rs.9000 crore. This is one of the key reasons LIC was insisting on a hefty exit price of Rs.320 per share as the delisting would mean Vedanta shareholders give up indirect access to HZL dividend. For now, the delisting plan looks to be off the table and we may have to wait for a more opportune moment in the future.

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