“Divided payout is fine as long as HZL doesn’t have to borrow for the purpose of offering a dividend. It should borrow only for its genuine operational requirements or for expansion, etc.
But the moment the government feels that borrowing proceeds are used for the dividend payout, it will raise a red flag,” the official told ET.
However, HZL hasn’t yet reached a stage where the dividend payout would threaten its short or medium-term financial prospects, and the company’s financials are in good shape, said the official.
HZL has announced dividends five times since July 2022 totalling ₹34,859 crore. Billionaire Anil Agarwal-controlled Vedanta, given its 64.92% holding in HZL, has been the biggest beneficiary with a dividend receipt of about ₹22,630 crore. The government, too, has raked in ₹10,297 crore, as it’s a significant minority shareholder with a 29.54% stake in HZL.An HZL spokesperson declined to respond to ET’s queries now, citing “silent period”. “However, on July 21, we have our board meeting and all these questions will be answered, if asked, in analysts’ call,” she said.
