Vedanta Ltd, led by chairman Anil Agarwal, unveiled its ambitious plan to raise ₹8,500 crore in capital through either equity or debt. This announcement comes alongside the declaration of an interim dividend amounting to ₹4,000 crore for the year. The company’s decision to raise capital reflects its strategic initiatives to fuel growth and expansion in its operations. With a dividend of ₹11 per share, Vedanta has set 25 May as the record date for shareholders to qualify for this payout.
In addition to the capital raise and dividend distribution, Vedanta disclosed investment in its Saudi Arabian unit, Vedanta Copper International VCI Co. Ltd (VCI). This investment will be utilized to establish a state-of-the-art copper rod manufacturing facility with a projected capacity of 125 KTPA (kilo tonnes per annum). This move is expected to open up new growth opportunities for the company in diverse geographies.
The company’s board of directors also approved an amendment in the articles of association to meet the terms of a financing agreement, underscoring Vedanta’s commitment to navigate financial intricacies effectively.
Vedanta’s history of distributing high dividends has been a hallmark of its shareholder-centric approach. These dividends, often surpassing the company’s earnings per share, have played a crucial role in supporting its London-based parent, Vedanta Resources, in meeting its debt obligations.
Despite reporting muted earnings performance in Q4FY24, Vedanta has showcased resilience, particularly in its aluminium and zinc segments. Notably, the cost of production for aluminium and zinc has witnessed consecutive declines, highlighting Vedanta’s focus on operational efficiency.
Furthermore, Vedanta has made significant strides in reducing its net debt, which stood at ₹56,338 crore as of 31 March, down from ₹62,493 crore as of 31 December. The improvement in the net debt to Ebitda ratio from 1.7x to 1.5x reflects the company’s prudent financial management amidst evolving market dynamics.
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