Vedanta Ltd shares will be in focus on Thursday, as the company board would consider paying first interim dividend for financial year 2024-25. Besides, it would consider raising funds by issue of equity shares or any other securities convertible into equity shares. The Anil Agarwal-led company recently announced March quarter results that met analysts expectations.
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Vedanta dividend history
Vedanta paid a total dividend of Rs 18,572 crore in FY24. This was against Rs 37,572 crore dividend it paid in FY23, Rs 16,689 crore in FY22 and Rs 3,519 crore in FY21. In a recent investor presentation, Vedanta said its 5-year average dividend yield at 17 per cent was 10 times the yield of Nifty 50 companies.
Vedanta said the record date for the purpose of determining the entitlement of the equity shareholders for the first interim dividend, if declared, is fixed as Saturday, May 25, 2024.
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Vedanta fund raising
Vedanta is looking to raise funds via shares or any other securities which could be converted into equity shares. It could a combination of such securities by way of rights issue, further public offer (FPO), via American depository receipts (ADRs) or global depository receipts, Foreign Currency Convertible Bonds (FCCBs), qualified institutions placement (QIP), preferential issue or any other method as may be permitted under applicable laws.
This would be subject to such regulatory and statutory approvals, including approval of the notice for the general meeting for obtaining the shareholders’ approval in this regard, as may be required.
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Vedanta FY25 capex plans
Vedanta gave FY25 capex guidance of $1.9 billion, which was up 12 per cent over FY24. It is primarily focused on vertical integration of the aluminum business (coal mine development, Lanjigarh alumina capacity expansion, and VAP capacities at Jharsuguda, BALCO) and capacity augmentation in oil & gas reserves, said Antique Stock Broking.
The company had earlier highlighted its strategic capex plan of $8.4 billion in the medium term with an average payback period of three years. The management expects topline to grow $4 billion and sees Ebitda accretion of $1 billion through this plan), Antique Stock Broking said.
What analysts say
Nuvama Institutional Equities said rising commodity prices improve cash flows and open up the potential of rise in valuation multiple. It feels that debt overhang should subside significantly. Vedanta’s debt likely peaked out in FY24, it said.
Antique Stock Broking has increased its price target on Vedanta to Rs 411 from Rs 318, with an implied FY26 EV/Ebitda multiple of 4.2 times, in line with global peers.
