Vedanta shares hit 52 weeks high on approving 3rd interim dividend for FY22

Vedanta Ltd shares rose over 3.5% to Rs 400.95 and touched a 52-week high on the BSE in Thursday’s intra-day trade after the board authorized a third interim dividend of Rs 13 per share on Wednesday, according to an exchange filing. For the fiscal year 2021-22, the interim dividend will be 1300% of the face value of Rs1 per share (FY22). The payment of the aforementioned dividend will cost the metals giant around Rs 4,832 crore.

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“In continuation to our Letter No. VEDL/Sec./SE/21-22/156 dated February 23, 2022, and pursuant to Regulation 30 of Listing Regulations, we wish to inform you that the Board of Directors of the Company through a resolution passed by circulation on Wednesday, March 2, 2022, have approved Third Interim Dividend of Rs 13 per equity share i.e. 1300% on the face value of Re. 1/- per share for the Financial Year 2021-22 amounting to Rs 4,832 crore,” the company said in a filing.

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The record date for determining shareholder eligibility for the aforementioned dividend, if announced, is set at March 10. Vedanta said that a minimum of 30% of the company’s attributable profit after tax (before exceptional items) (excluding HZL earnings) will be given as a dividend.

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Previously, billionaire Anil Agarwal’s Vedanta cancelled the restructure plan, which included a demerger or spin-off, and stated that it will remain in its current form. The company had in November said that it would consider the hiving off and separate listing of its aluminium, iron and steel, and oil and gas businesses as standalone entities.

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Furthermore, the company has announced a capital allocation policy that is consistent, disciplined, and balanced, with long-term Balance Sheet management. The capital allocation outlay will be divided into three major categories: capital expenditure, dividend policy, and inorganic growth. The company will maintain the optimal leverage ratio (Net Debt/EBITDA) at the consolidated level, it said.

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“Vedanta Limited’s Dec’21 consolidated leverage ratio is 0.7x, which is amongst the best compared to the peer group. During normal business cycles, the company will maintain this ratio below 1.5x at the consolidated level,” the company noted.

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Overall capital allocation will maximise total shareholders returns (TSR), it further said. Vedanta also noted that its capital expenditure will include both growth and sustaining CAPEX.

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The company claimed that its capital allocation policy will be the “primary guiding factor” and “we will focus on organic growth”. Vedanta will “consider select mergers and acquisitions”, within the overall capital allocation framework, the mining sector behemoth said, adding that it has “proven expertise and successful track record of turning around acquired businesses”.