Vedanta Rises On 2nd Interim Dividend, Cut In Windfall Gains Tax
The significant dividend payment is crucial for Vedanta Resources, the company that promotes Vedanta and is struggling under a heavy debt load.
The following day, July 19, the business declared a sizable second interim dividend, and shares of Vedanta spiked in morning trading.
The government’s choice to reduce the additional excise charge levied on the production of crude oil also helped the stock.
Vedanta declared a second interim dividend of Rs 19.5 per share, for a total dividend payment of Rs 7,250 crore.
The entire dividend payment made by the corporation year 2022–2023 is currently around Rs 19,000 crore.
The significant dividend payment is crucial for Vedanta’s promoter Vedanta Resources, which is struggling with a heavy debt load at a time when interest rates are rising dramatically worldwide.
In the years leading up to its now-failed delisting offer in 2020, Vedanta’s promoter aggressively took on debt from investors.
In addition to the second dividend, the government’s declaration that the fixed special excise duty on crude oil production would be reduced from Rs 23,250 per tonne to Rs 17,000 per tonne starting July 20 helped the stock.
The government shocked the market earlier this month with a purported tax on windfall gains generated by crude oil producers like Vedanta as a result of nearly eight-year highs in the price of petroleum throughout the world.
From the 8 high of $125 per barrel reached in June and the March highs of $137, crude prices have dropped by more than 15% and over 22%, respectively.
Although oil production has not yet had a significant impact on the company’s profits, the corporation has hailed new Rajasthani discoveries as a game-changer for India’s energy requirements.
On the National Stock Exchange, Vedanta shares were up 5.3 percent at Rs 251.4 at 10:35 a.m.