June 18, 2025 | Mumbai | Corporate Dividend Announcement | Hindustan Zinc Stake Sale | Vedanta Group Restructuring
In a significant corporate development with direct implications for equity investors and the metals sector, Vedanta Ltd announced its first interim dividend of ₹7 per equity share for the financial year 2025-26, amounting to a total cash outgo of ₹2,737 crore. The announcement, made on June 18, 2025, was accompanied by the confirmation of a substantial stake sale in Hindustan Zinc Ltd (HZL), where the mining conglomerate divested 1.6% equity through a block deal valued at ₹3,028 crore. This dual move underscores Vedanta’s ongoing strategy to strengthen its balance sheet and prepare for the impending demerger of its diversified business verticals.
Strategic Cash Deployment: Dividend Reflects Financial Resilience
Vedanta’s Board of Directors approved the ₹7 per share dividend during its June 18 meeting, reinforcing the group’s consistent dividend track record amid its ongoing balance sheet optimisation. The declared amount, payable on a face value of ₹1 per share, will benefit shareholders registered as of June 24, 2025, which has been fixed as the record date. This marks the group’s first dividend distribution in FY26, following a series of four interim payouts in FY25 that cumulatively exceeded ₹16,000 crore. Despite rising capex commitments and restructuring costs, Vedanta’s generous cash return policy is seen as a signal of sustained cash flow generation and operational efficiency across its core verticals such as aluminium, zinc, oil & gas, and iron ore.
Highlights
Vedanta declares ₹7 interim dividend for FY26, totalling ₹2,737 crore.
Record date for dividend payout set as June 24, 2025.
This is the fifth dividend in 13 months, reflecting strong financial health.
Cash outlay continues despite large-scale restructuring and debt reduction plans.
Also Read : Hindustan Zinc Shares Plunge 7% After Vedanta Sells Rs 3,323 Crore Stake via Block Deal
Hindustan Zinc Stake Sale Raises ₹3,028 Cr Through Institutional Route
Vedanta confirmed on Wednesday that it offloaded 66.7 million shares—representing a 1.6% stake—in Hindustan Zinc Ltd to institutional investors via an accelerated book-building process. The average deal price stood at ₹453.97 per share, just below Hindustan Zinc’s previous close, resulting in total gross proceeds of ₹3,028 crore. The stake sale is a calibrated move to monetise non-core holdings while managing leverage ahead of the corporate demerger, which will see Vedanta split into multiple listed entities across metals, energy, and renewables. Notably, Vedanta had held a 63.42% stake in Hindustan Zinc as of December 31, 2024. The marginal reduction, although not a controlling dilution, helps enhance liquidity and improve debt-servicing metrics as part of a broader capital discipline framework.
Highlights
1.6% stake in Hindustan Zinc sold for ₹3,028 crore.
Average share sale price set at ₹453.97 through block deal.
Funds to support deleveraging and growth capex.
Vedanta’s stake in HZL marginally reduced from 63.42%.
Corporate Restructuring: Demerger Strategy Drives Capital Reallocation
The dual announcement aligns with Vedanta’s long-term restructuring strategy aimed at unlocking value via the separation of its business units into sector-focused, independently listed companies. Announced in 2023 and approved by the board in 2024, the demerger will see creation of distinct entities focused on aluminium, oil & gas, power, base metals, and steel. According to company officials, the capital raised from the Hindustan Zinc deal will provide enhanced financial agility to these verticals as they prepare for independent operations. Vedanta management emphasised that the stake monetisation and dividend announcement collectively signal both financial strength and investor confidence in the ongoing transformation. As each vertical targets bespoke capital strategies post-demerger, the current capital action provides momentum to future fundraising and operational autonomy.
Highlights
Demerger aims to create independent sector-focused listed entities.
Stake sale funds to support standalone entity readiness and capex.
Vedanta using capital flexibility to accelerate transformation timelines.
Investor confidence cited as key driver behind strategic execution.
Hindustan Zinc Falls 6% While Vedanta Holds Ground
Equity markets responded with a measured reaction to the block deal and dividend announcement. Shares of Hindustan Zinc Ltd fell over 6% on the NSE to ₹457, reflecting near-term dilution concerns and broader sentiment pressure following recent volatility. Meanwhile, Vedanta shares showed resilience, trading marginally higher at ₹460 around 1:20 PM IST, buoyed by the robust dividend payout and improved liquidity profile. Market analysts noted that the sale was well-absorbed by institutions, helping avoid deeper shocks typically associated with large block trades. Additionally, the stock performance comes against the backdrop of Hindustan Zinc’s recently announced ₹12,000 crore investment in a new smelter and mining complex in Rajasthan, which has yet to offset investor concerns over near-term profitability and shareholding overhang.
Highlights
Hindustan Zinc stock fell 6% post stake sale news.
Vedanta shares traded marginally higher due to strong dividend optics.
Block deal absorption by institutions limited downside volatility.
Market awaits clarity on future capex-driven earnings growth.
Dividend History and FY25 Performance Add Context to Shareholder Rewards
Vedanta has built a reputation for delivering consistent shareholder returns through dividends, supported by its diversified revenue base and commodity exposure. In FY25, the company declared four interim dividends: ₹11 in May, ₹4 in July, ₹20 in September, and ₹8.5 in December, aggregating to more than ₹16,000 crore. These payouts came even as the company ramped up investments in asset expansion, reduced its gross debt, and improved operational margins. In the March 2025 quarter, Vedanta reported a 154.4% YoY surge in consolidated net profit to ₹3,483 crore, driven by higher production volumes and improved cost efficiencies. The latest dividend for FY26, therefore, fits within the broader context of stable cash generation and a shareholder-focused capital allocation policy, further supported by the recent monetisation initiative.
Highlights
Over ₹16,000 crore paid in dividends during FY25 via four tranches.
March 2025 quarter saw 154% jump in consolidated net profit.
Dividend payouts backed by high free cash flow and stable operations.
Latest ₹7 dividend is a continuation of shareholder-centric policy.
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