Hindustan Zinc plans special dividend payout of Rs 8,000 cr to shareholders

HZL's board is likely to meet on Tuesday to consider and approve the special dividend payment for this year

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

HZL's board is likely to meet on Tuesday to consider and approve the special dividend payment for this fiscal, they said.

"Of this, around 30 per cent or Rs 2,400 crore may go to the Centre contributing to its non-tax revenues for the fiscal," sources in the know of the development said.

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

 

This special dividend will be over and above the regular dividend of around Rs 6,000 crore, which HZL doles out every year.

Apart from the government, this will also benefit promoter Vedanta Ltd, which holds around 65 per cent stake in HZL, and will receive around Rs 5,100 crore, which it may use to further de-leverage its balance sheet.

Vedanta will also be selling up to a 3.31 per cent stake in HZL through the Offer for Sale issue from August 16 to 19. It has set the floor price at Rs 486 per share.

HZL has benefitted from steady growth in sales volume and balanced capital expenditure for continuing operations, creating a strong track record of generating cash flows. The company said in its scheme of arrangement filed with the NCLT that it expects the growth trajectory to continue and its business operations will keep generating incremental cash flow over the coming years.

In the last financial year ended March 2024, Hindustan Zinc had paid a total dividend of Rs 5,493 crore, of which the government received Rs 1,622 crore against its 29.5 per cent stake in the company.

In FY22-23, the company made a record dividend payout of around Rs 32,000 crore, with the government getting a whopping Rs 9,500 crore.

During the June quarter, Hindustan Zinc's market capitalisation more than doubled as it added almost Rs 1.6 lakh crore. In fact, the company touched its highest-ever market cap of Rs 3.4 lakh crore during the quarter.

Rs 6,500 cr HZL OFS on Friday

The Rs 6,500 crore offer for sale (OFS) in commodity major Hindustan Zinc (HZL) will be launched on Friday, with a little over 120 million shares of the non-retail portion to be auctioned. The sale of the rema­ining 13.4 million shares, worth Rs 650 crore at the base price of Rs 486, will take place on Monday.

Shares of HZL on Wednesday ended at Rs 573, down 1.3 per cent. The floor price is set 15 per cent below the last close. Investors must place bids above the floor price in the OFS. Through the OFS, promoter Vedanta, which holds 64.92 per cent stake, is looking to divest 3.17 per cent of its holdings. Citibank and JM Financial are handling the share sale.  BS Reporter