Vedanta Declares ₹7 Per Share Interim Dividend for FY26, Reinforcing Shareholder Focus

In a significant move that underlines its shareholder-centric approach, Vedanta Ltd on Tuesday announced the first interim dividend of ₹7 per equity share for the financial year 2025-26 (FY26). The payout decision reflects the company’s robust cash generation and consistent policy of rewarding investors.

Key Details of the Dividend Declaration

Vedanta's board of directors, in a meeting held on June 18, 2025, approved the interim dividend of ₹7 per share with a record date set for June 25, 2025. The dividend will be paid to shareholders whose names appear on the company’s register at the close of business hours on the record date.

At the face value of ₹1 per share, this translates to a 700% payout, amounting to a total outflow of approximately ₹2,591 crore, as per the company’s stock exchange filing.

Strategic Move Ahead of Demerger Plans

This announcement comes at a time when Vedanta is advancing its multi-business demerger strategy, which aims to unlock value by creating independent listed entities across its core sectors: aluminum, oil & gas, power, base metals, and ferroalloys. Analysts suggest that continued dividend payouts reassure investors during this structural transition.

“The dividend announcement reflects confidence in the cash flows of the underlying businesses. Vedanta continues to remain a high dividend-yielding stock even as it undergoes major structural changes,” said Harish Kothari, equity strategist at Elara Capital.

Track Record of High Payouts

Vedanta has long been recognized for its generous dividend history. In FY25, the company declared five interim dividends totaling ₹50.5 per share, which amounted to a cumulative payout of over ₹18,500 crore. This new interim dividend for FY26 further reinforces the company’s position among top dividend-paying entities in India.

“The company has consistently balanced its capex plans and debt servicing with steady shareholder returns. The latest interim dividend aligns with Vedanta’s strategy of rewarding investors while maintaining operational growth,” said Priya Arora, metals and mining analyst at JM Financial.

Market Reaction and Financial Context

Following the announcement, Vedanta's stock traded flat in early sessions, hovering around ₹420 on the NSE, with minor intraday volatility. Analysts believe that the dividend news had largely been priced in, given the company’s consistent track record and improving operational performance in Q4 FY25.

Vedanta reported a strong consolidated EBITDA of ₹9,150 crore in the March quarter, buoyed by improved commodity prices and cost optimization efforts. The company also reduced its gross debt marginally, which markets viewed as a positive sign of capital discipline.

However, with commodity prices continuing to exhibit cyclical trends, analysts remain watchful of earnings momentum in the coming quarters.

Parent Company’s Debt Strategy in Focus

The dividend payout is also being viewed in the context of London-based Vedanta Resources’ ongoing efforts to reduce debt. In recent months, the parent has taken proactive steps, including refinancing deals and prepayments, to manage its upcoming maturities and improve credit metrics.

There has been market speculation that dividend payouts from Vedanta Ltd help fund these obligations, though the company maintains that its India operations continue to generate healthy cash flows to sustain independent capex and dividends.

“The parent’s debt burden remains a concern, but recent refinancing and the Indian arm’s strong cash generation offer some comfort. Any excessive dividend payouts beyond free cash flows would raise red flags,” cautioned Amit Dixit, institutional research head at ICICI Securities.

Investor Outlook and What Lies Ahead

From an investor’s standpoint, Vedanta continues to attract attention for its high dividend yield, currently over 11% on trailing basis, making it a preferred pick among income-focused investors.

However, market participants are advised to remain mindful of key triggers in the near term:

• Progress of the Vedanta demerger scheme and regulatory approvals.

• Trend in global metal and crude oil prices.

• Update on the debt situation of Vedanta Resources Ltd.

• Further clarity on dividend sustainability, especially if macro conditions tighten.

Despite structural complexities, many brokerages retain a neutral to positive stance on the stock. Brokerage Motilal Oswal recently noted, “While the near-term outlook remains volatile due to global commodity dynamics, long-term value unlocking through demerger remains a positive catalyst.”

With the declaration of the first interim dividend for FY26, Vedanta has once again demonstrated its commitment to delivering value to shareholders. As the company prepares for one of the most ambitious corporate restructurings in India Inc., investors will be closely watching the balance between capital returns and strategic execution.