Hindustan Zinc Ltd Announces Rs 8,000 Crore Special Dividend

Vedanta group firm Hindustan Zinc Ltd (HZL) plans a special dividend payout of Rs 8,000 crore to shareholders this fiscal. The board is set to meet Tuesday for approval. The Centre, holding a 29.5% stake, will receive Rs 2,400 crore, while promoter Vedanta Ltd will benefit significantly.

Vedanta group firm Hindustan Zinc Ltd (HZL) plans a special dividend payout of Rs 8,000 crore to its shareholders in the current fiscal, sources disclosed.

HZL's board is expected to convene on Tuesday to consider and approve the special dividend payment.

Approximately 30% or Rs 2,400 crore of this payout will go to the Centre, contributing to its non-tax revenue for the fiscal year, knowledgeable sources said.

This decision follows the National Company Law Tribunal's (NCLT) approval to transfer Rs 10,383 crore of general reserves to retained earnings.

The special dividend is in addition to the regular annual dividend of around Rs 6,000 crore that HZL distributes. Government and promoter Vedanta Ltd, which holds a 65% stake in HZL, will be primary beneficiaries. Vedanta could use its Rs 5,100 crore share to reduce debt.

Vedanta will also sell up to 3.31% stake in HZL via Offer for Sale (OFS) from August 16 to 19, with a floor price set at Rs 486 per share.

HZL has shown steady sales growth and balanced capital expenditure, creating strong cash flows. It projects continued business growth and cash generation.

Last fiscal, Hindustan Zinc paid a total dividend of Rs 5,493 crore, with the government receiving Rs 1,622 crore for its 29.5% stake. In FY22-23, HZL’s record dividend payout was around Rs 32,000 crore, with the government getting Rs 9,500 crore.

During the June quarter, Hindustan Zinc's market capitalization more than doubled, adding almost Rs 1.6 lakh crore, and reaching a record high of Rs 3.4 lakh crore.