 "Hindustan Zinc clarifies on reports of Rs 6,000 crore special dividend")
Hindustan Zinc Limited (HZL) released a statement on Monday addressing recent media reports suggesting that the company is expected to declare a special dividend amounting to Rs 6,000 crore this month. HZL clarified that it is ‘unable to comment’ on this speculation and that no such proposal has been submitted to the board of directors for consideration.
In an exchange filing on Monday, the company said, “It may be noted that any such kind of decision is under the power of the Board of Directors (‘Board’) of the Company, and the Company has not yet submitted any such proposal to the Board.”
HZL’s Rs 6,000 crore special dividend
The media reports came on the heels of the recent approval from the National Company Law Tribunal (NCLT), which allowed HZL to transfer Rs 10,383 crore from its general reserves to retained earnings. The HZL board is anticipated to meet within the next two weeks to potentially finalise the special dividend, which could translate to Rs 14.2 per share for shareholders.
Should the dividend be approved, Vedanta, which holds a 64.92 per cent stake in Hindustan Zinc, stands to receive Rs 3,895 crore, which could assist in reducing its debt. Meanwhile, the government, holding a 29.54 per cent stake, could receive Rs 1,772 crore.
The NCLT’s Jaipur bench issued the order on July 16, allowing the reclassification and transfer of funds from general reserves to retained earnings. As of March 31, 2024, Hindustan Zinc reported total reserves of Rs 14,350 crore and a total debt of Rs 8,722 crore.
HZL issues clarification
Clarifying further on the matter, the company mentioned, “There is no information which has not been announced to the stock exchanges and which should have been announced by the Company in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.”
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For the quarter ended June 30, 2024 (Q1 FY25), HZL reported a 19.4 per cent year-on-year (Y-o-Y) increase in net profit, largely driven by cost reductions and higher metal and silver prices. The company posted a net profit of Rs 2,345 crore in Q1 FY25, up from Rs 1,964 crore in the corresponding period of the previous year. Consolidated net sales for Q1 FY25 stood at Rs 7,893 crore, marking an 11 per cent Y-o-Y increase.
HZL also recorded its highest-ever first-quarter production of mined and refined metal. Mined metal production reached 263,000 tonnes, a 2 per cent increase Y-o-Y, while refined metal production stood at 262,000 tonnes, up 1 per cent Y-o-Y. However, saleable silver production declined by 7 per cent Y-o-Y, totalling 167 tonnes for the quarter.
Looking ahead, Hindustan Zinc has ambitious expansion plans. The company is aiming to increase its mining and smelting capacity from 1.2 million tonnes to 2 million tonnes, supported by a strong demand outlook.
Shares of HZL were trading at Rs 617.95 at 2:20 pm on Monday on the BSE, up 4 per cent.