Hindustan Zinc Ltd (HZL), a leading zinc and silver producer, is set to announce a special dividend of Rs.6,000 crore this month. This follows a recent National Company Law Tribunal (NCLT) order allowing the company to move Rs.10,383 crore from its general reserves to retained earnings.
The HZL board will meet in the next two weeks to finalize the dividend. Shareholders can expect Rs.14.2 per share in special dividends on top of their regular annual dividend. Vedanta Ltd., which owns 64.92% of HZL, will receive about Rs.3,895 crore from this payout, potentially using it to lower its debt. The Indian government, with a 29.54% stake, is projected to gain Rs.1,772 crore.
On July 16, 2024, the NCLT approved transferring Rs.10,383 crore from Hindustan Zinc’s reserves to retained earnings. As of March 31, 2024, HZL had total reserves of Rs.14,350 crore and debt of Rs.8,722 crore.
In FY24, Hindustan Zinc paid out Rs.5,493 crore in dividends, following a record payout of Rs.32,000 crore in the previous fiscal year. The company’s shares surged 87% in 2024, significantly outperforming the Sensex’s 11% gain. In Q1FY25, HZL’s market capitalization more than doubled.
For Q1FY25, Hindustan Zinc reported a 12% increase in revenue to Rs.8,130 crore, a 17% rise in EBITDA, and a 19% boost in profit after tax to Rs.2,345 crore. The company also generated Rs.3,432 crore in free cash flow from operations, highlighting its strong financial performance.
