Vedanta Shares Jump Nearly 4% Ahead Of First Dividend After Demerger, Will Investors Still Get Big Payouts?

Mumbai: Shares of Vedanta jumped nearly 4 per cent on Tuesday after the Anil Agarwal-led metals major fixed October 14 as the record date for its prospective first interim dividend for FY27.

The company's board is scheduled to meet on October 8 to consider and approve the dividend. The announcement has drawn attention as it will be Vedanta's first dividend decision following its major demerger.

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Vedanta Shares Rise 3.86 percent

Vedanta shares were trading at Rs 264.90 on the NSE at 1:59 pm IST on October 6, up 3.86 per cent, or Rs 9.85, from the previous close of Rs 255.05.

The stock opened at Rs 257.20 and climbed to an intraday high of Rs 265.50. It touched a low of Rs 256.60 during the session.

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Vedanta's market capitalisation stood at around Rs 1.03 lakh crore, while its price-to-earnings ratio was 5.29. The stock's 52-week high and low were Rs 360 and Rs 167.62, respectively.

Who Will Get The Dividend?

Vedanta has fixed October 14 as the record date for determining shareholders eligible for the dividend, subject to approval by the board.

Under the T+1 settlement system, October 13 would effectively be the last day to buy Vedanta shares to become eligible for the payout.

Vedanta has a long history of rewarding shareholders. The company has declared 49 dividends since July 2001.

Earlier this year, it paid an interim dividend of Rs 11 per share in March. It had announced dividends of Rs 16 and Rs 7 per share in August and June last year.

In 2024, Vedanta announced four dividends aggregating Rs 43.5 per share.

First Payout After Demerger

The upcoming dividend is significant because it will be the first after Vedanta's demerger into five entities.

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Four businesses — Vedanta Aluminium Metal, Vedanta Power, Vedanta Oil and Gas, and Vedanta Iron and Steel — were spun out in June, while the original Vedanta retained other businesses.

Will Dividends Become Smaller?

Sunny Agrawal, Head of Fundamental Research at SBI Securities, said residual Vedanta is likely to remain a dividend-paying company, but its absolute dividend per share could decline structurally.

This is because several large cash-generating businesses have been carved out following the demerger.

Residual Vedanta houses Hindustan Zinc, Zinc International and the base metals business. Future payouts could therefore depend heavily on earnings from Vedanta's 60.71 per cent stake in Hindustan Zinc.

Commodity Prices Become Crucial

Hindustan Zinc's earnings are influenced by zinc and silver prices, making Vedanta's future dividends potentially more sensitive to commodity cycles.

Investors who previously saw Vedanta as a single high-yield stock may now need exposure to the basket of demerged companies to seek similar aggregate dividend returns.

While improved capital allocation across independent companies could support shareholder returns, analysts expect dividends to become more business-specific and potentially more volatile.

Disclaimer: This article is based on company disclosures, market data and analyst views. Investors should consult financial advisers before making decisions.

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