Biggest Zinc Producer of India approved on Wednesday a dividend of Rs. 27.5 per share, amounting to Rs. 13,990 crore. Billionaire This year, Anil Agarwal’s Hindustan Zinc Ltd (HZL) announced a special dividend that takes its payments to shareholders above $4 billion, which is a record return by an Indian company. The profit is from a surge in metals prices.
The immediate beneficiaries are parenting Vedanta Ltd., which has 65 percent share of the Udaipur, Rajasthan-based Company, and the Indian government has 30 percent share. Both Vedanta and Hindustan Zinc Limited (HZL) rallied as investors eyed the impact on Vedanta’s debt pile, which includes almost $2 billion due for refinancing this month and almost $3.5 billion over the following 2 years. That brings the total dividend paid by HZL for this year, ending in 31st March to 271.6 billion rupees. The payout comes from a sudden jump in zinc price in this year. It has got 55 percent gain over the past year, boosted by mine shutdowns and a steady performance of the economy in China, the top consumer. The zinc metal is used to galvanize steel structures.
In 2014, Indian govt. agreed to sell out of Hindustan Zinc, but that effort has foundered. In February Vedanta’s CEO, Mr. Tom Albanese said that India has benefited from the stake after the gains in metal prices and that there are no plans for it to reduce its actual position. The comments were echoed by India’s mines secretary.
HZL Chairman Agnivesh Agarwal said, “We are pleased to reward our shareholders with a special dividend, which demonstrates our commitment towards delivering value to our shareholders and reflects our confidence in its continued high performance. Since 2002, disinvestment by the government, the cumulative dividends paid by the company, including the current special dividend, is Rs37 thousand crore”. Hindustan Zinc Limited (HZL) had reported a 28 percent jump in profit for the December 2016 quarter to Rs2,320 crore helped through higher zinc metal production and better prices.
The Executive Vice President India Infoline Limited, Mr. Sanjiv Bhasin said, “Vedanta Ltd. continues to be in a very good space given all its verticals are doing well and if they can reduce the debt that will be a better ploy and it will increase the returns for all the shareholders,” “Metals have been the best asset class in the past one year as a proxy to global economic growth and given the stimulus announced in the United States, which will continue to outperform.” Chairman Anil Agarwal is also maneuvering around Anglo American Plc, after a merger proposal failed last year, planning to buy almost $2.5 billion of stake in the mining giant.
Hindustan Zinc Limited (HZL) can pay a dividend of 20 rupees or above per share next year, with free cash flow over $1 billion and a net cash position,
