Hindustan Zinc Ltd to Offer Special Dividend of ₹8,000 crore to Shareholders

Vedanta group company Hindustan Zinc Ltd (HZL) plans to distribute a special dividend of ₹8,000 crore to its shareholders in the current fiscal year, according to sources. HZL’s board is expected to meet on Tuesday to consider and approve the special dividend.

Of this amount, approximately 30%, or ₹2,400 crore, is likely to be allocated to the central government, boosting its non-tax revenues for the fiscal year, sources familiar with the matter said.

The move follows the National Company Law Tribunal’s (NCLT) approval to transfer ₹10,383 crore from general reserves to retained earnings. This special dividend will be in addition to the regular dividend of around ₹6,000 crore that HZL distributes annually.

This payout will also benefit promoter Vedanta Ltd, which owns approximately 65% of HZL. Vedanta is expected to receive around ₹5,100 crore, which it may use to further reduce its debt. Additionally, Vedanta plans to sell up to a 3.31% stake in HZL through an Offer for Sale (OFS) between August 16 and 19, with a floor price set at ₹486 per share.

HZL has seen consistent growth in sales volume and has maintained balanced capital expenditure for ongoing operations, establishing a strong track record of generating cash flows. In its scheme of arrangement filed with the NCLT, the company stated that it anticipates continued growth and expects its business operations to generate increasing cash flow in the coming years.

In the last financial year, which ended in March 2024, Hindustan Zinc paid a total dividend of ₹5,493 crore, with the government receiving ₹1,622 crore for its 29.5% stake in the company.