All Eyes on Vedanta’s Interim Dividend. Big Payout Around the Corner?

One of India’s top dividend stocks – Vedanta has once again come into the spotlight with its upcoming board meeting scheduled for June 18, where the company will consider its first interim dividend for the financial year 2025–26 (FY26). 

If a dividend is announced during the meeting, shareholders on record as of June 24 will be eligible to receive it. 

But what does this development mean in the larger context of Vedanta’s dividend policy, financial performance, and ongoing corporate restructuring? 

Here’s a comprehensive look.

A History of Robust Dividends

Vedanta has long positioned itself as a shareholder-friendly company. In FY25 alone, the company declared four interim dividends, totaling ₹43.5 per share. These were paid in the following tranches:

• – ₹11 per share in May 2024
• – ₹4 per share in July 2024
• – ₹20 per share in September 2024
• – ₹8.5 per share in December 2024

Together, these payouts amounted to a significant distribution of wealth to shareholders. Over a trailing 12 months basis, Vedanta’s total dividend payout reached ₹46 per share, translating to a dividend yield of approximately 9% to 11% based on the stock’s price range during that period.

This consistent dividend strategy reflects Vedanta’s commitment to rewarding shareholders and highlights its strong cash-generating capabilities, especially from its core metals and mining operations.
Source: Economic Times

Financial Performance: A Strong Close to FY25

Backing up its dividend capacity is Vedanta’s financial performance, which saw a notable uptick in the March 2025 quarter. 

The company posted a 154.4% jump in consolidated net profit, reaching ₹3,483 crore compared to ₹1,369 crore in the same quarter the previous year.

Total income also saw a healthy rise, coming in at ₹41,216 crore. This growth was attributed to lower costs and higher volumes, which together enhanced profitability.

Source: Vedanta Q4 Report

What’s Driving These Payouts?

Vedanta’s ability to declare high and frequent interim dividends is primarily driven by:

1. Strong cash flows from diversified operations across zinc, aluminium, copper, iron ore, oil & gas, and power.
   
2. Strategic holdings in profit-generating subsidiaries like Hindustan Zinc, BALCO, Sterlite Copper, Sterlite Energy, and Cairn India.
   
3. A consistent track record of returning excess cash to shareholders through interim payouts, rather than waiting for annual dividends.
   

The upcoming dividend proposal on June 18 is in line with this established approach. The company typically reviews its interim dividend policy at mid-year and year-end intervals, and this meeting appears to follow that schedule.

A Boost from Hindustan Zinc

In a related development, Hindustan Zinc, Vedanta’s key subsidiary, declared its first interim dividend of ₹10 per share for FY26 earlier this month. Given Vedanta’s majority stake in Hindustan Zinc, this results in a cash inflow of nearly ₹2,500 crore.

This upstream dividend from Hindustan Zinc further strengthens Vedanta’s liquidity position and enhances its capacity to consider another interim dividend for its shareholders.

Vedanta Demerger in Progress

Another significant factor on investors’ radar is Vedanta’s ongoing corporate demerger. The company is in the process of splitting its existing structure into five separate listed entities, each catering to a specific business vertical.

The demerger is expected to help unlock value across Vedanta’s diversified businesses by allowing focused operations and independent capital allocation strategies. The company has expressed confidence in completing this demerger by September 2025.

While the process is still underway, the dividend decision on June 18 could serve as an indicator of Vedanta’s liquidity strategy during this transitional phase.
Source: MoneyControl

Shareholding Snapshot and Market Reaction

As per the shareholding pattern at the end of March 2025, Vedanta Resources, the promoter group entity, holds a 56.38% stake in Vedanta. This significant ownership stake naturally aligns the promoters’ interests with those of public shareholders when it comes to dividend declarations.

On the market front, Vedanta’s stock closed 0.5% lower at ₹458.35 on Friday last week, preceding the board meeting announcement. Over the past one month, however, the stock has gained around 5%, suggesting cautious optimism among investors ahead of the dividend decision.
Source: NSE

Final Thoughts

Vedanta’s board meeting on June 18 is more than a routine agenda item—it marks the start of FY26’s shareholder engagement cycle. With a strong dividend history, solid FY25 results, and support from its subsidiaries, the company appears well-positioned to make its first interim payout decision for the new fiscal year.

However, as the demerger process progresses and market conditions evolve, future payouts may be influenced by strategic capital allocation needs across the soon-to-be-separated entities. 

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