Snapping four sessions losing streak, shares of Hindustan Zinc, a subsidiary of Vedanta, gained over 2% intraday trade on Tuesday after the metals and mining announced a second interim dividend of ₹19 per share for the financial year 2024-25, amounting to ₹8,028.11 crore. The record date for the payment of dividend has been set as Wednesday, August 28.
“The board of directors of Hindustan Zinc, at its meeting held today, has considered and approved the second interim dividend of ₹19 per equity share i.e. 950% on face value of ₹2 per equity share for the financial year 2024-25, amounting to ₹8,028.11 crore,” Hindustan Zinc says in an exchange filing today.
Cheering the news, Hindustan Zinc shares rose as much as 2.28% to ₹507.10, while the market capitalisation surged to ₹2.14 lakh crore. Early today, the mining heavyweight opened flat at ₹495.75, after ending 4.65% lower at ₹495.75 on the BSE.
The stock has fallen 19.3% in the past four sessions after Anil Agarwal-led Vedanta announced to sell a 3.17% equity stake in HZL through an offer for sale. The base offer size was 1.22% with an option to sell an additional 1.95% in case of oversubscription, representing 3.17% of the company's total issued and paid-up equity share capital. The floor price for the offer was fixed at ₹486. On August 16, the parent entity announced to further offload a 0.29% stake in the company via its ongoing OFS.
Hindustan Zinc has a strong track record of paying hefty dividends to its shareholders. In May this year, the company declared an interim dividend of ₹10 per equity shares of face value of ₹2 each, amounting to ₹4,225.32 crore. Last fiscal, the company paid ₹23 dividend for the full year, while it declared 42 dividends since June 28, 2001.
As per the latest shareholding data available on the exchanges, the government owned a 29.54% stake in HZL while Vedanta held 64.92% shares in the company. Anil Agarwal-led Vedanta has pledged nearly all its shareholding in HZL as collateral for loans taken by the company or the group.
Earlier this month, Sandeep Modi, CFO of Hindustan Zinc, in Q1 FY25 earnings conference call said that the company paid ₹4,225 crore as dividend during the April-June period of 2024. “As a key highlight of the quarter, Hindustan Zinc delivered the highest shareholder returns among the major Indian companies, reinforcing the trust among the investor community.”
During the period, the total return per share in the form of capital appreciation stood at ₹377. Considering a dividend of ₹10 per share, the shareholder returned total to ₹387 per share. With a whopping 133% return on the closing price of the previous fiscal year, the Company's returns were incomparable with 18X returns as compared to Nifty 50 and 7X returns as compared to Nifty Metal indices,” Modi said during the conference call.
For Q1 FY25, Hindustan Zinc reported a 19.4% growth in net profit to ₹2,345 crore as compared to ₹1,964 crore during the corresponding quarter of FY24, aided by rise in metal production and market tailwinds. The revenue from operations stood at ₹7,893 crore, up 11% from ₹7,111 crore in the same period of previous financial year, driven by better metal volume and metal and silver prices. The company EBITDA rose 18% YoY to ₹3,946 crore.
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