Vedanta Board Approves Fundraising Plans, Announces Interim Dividend

Summery

Vedanta finalises to pay the first interim dividend of FY2024-25 at ₹11 per share. The board has also approved investment in Vedanta Copper International (VCI) for a copper rod plant in Saudi Arabia

Mining group Vedanta announced on May 16 that its board has approved plans to raise up to ₹8,500 crore. However, as stated in the company’s exchange filing, the exact offering method is yet to be determined.

Besides, the board has also approved an initial interim dividend of ₹11 per share to shareholders for the financial year 2024-25. The dividend payout is ₹4,089 crore. A record date for the dividend payment has been set for May 25, the company said in a statement.

The board has also approved an investment in Vedanta Copper International (VCI) to set up a copper rod plant in Saudi Arabia. Following this investment, VCI will become a direct wholly-owned subsidiary of Vedanta, as per the filing.

In the last year, Vedanta announced the formation of a new subsidiary in Saudi Arabia for its copper business under its subsidiary Malco Energy Limited. The limited company was called Vedanta Copper International VCI Company Limited.

Meanwhile, Vedanta is exploring ways to raise capital through equity dividends or other means such as new public offerings or rights issues This strategy is in line with the company’s objective of reducing the underlying debt by $3 billion over the next three years. As of March 31, Vedanta showed that expenses fell to ₹56,338 crore, down ₹6,155 crore from the previous three months.

In the post-earnings call last month, Vedanta chief financial officer Ajay Goel expressed optimism about the decline in finance costs in the current fiscal. "All the discussions that go on, any refunds will be more cost-effective than before," he said.

In the fourth quarter, Vedanta witnessed a 27% decline in fiscal fourth-quarter profit, primarily driven by rising finance costs and weakened prices of metals such as zinc, copper, and aluminium.