Vedanta Chairman Anil Agarwal Quashes Promoter Stake Sale Rumors

In a significant development for investors and market watchers, Vedanta Chairman Anil Agarwal has confirmed that there are no plans to reduce the promoter shareholding in Vedanta Ltd. Below the current levels. This announcement was made during an exclusive interview with CNBC-TV18, providing much-needed clarity and reassurance to stakeholders.

Promoter Stakeholding: Current Status and Historical Context

As of March 31, 2024, the promoters of Vedanta Ltd. Held a 61.95% stake in the company. This figure is a slight decrease from the 63.71% stake recorded on December 31, 2023. The reduction is attributed to a block deal in February 2024, where promoters sold a portion of their stake valued at over ₹2,615 crore. Despite this sale, Agarwal emphasized that the current level of promoter holding is satisfactory.

“We have 62% - 61 point something percent of holding of the company and we are comfortable. Any investment banker comes and gives me some idea, we will work on it. (But) at this point of time, there is nothing on the cards to take our holding down below 61.5%,” Agarwal stated.

Decline in Promoter Shareholding: A Trend Since 2022

The promoter shareholding in Vedanta has seen a gradual decline starting from December 2022. Back then, the promoters held nearly 70% of the company. This trend has brought the holding just over 60% as of now. However, Agarwal’s recent statements assure that further reduction below the current threshold is not planned.

Addressing Debt Concerns

Another critical issue that Agarwal addressed is the debt at the promoter level. He reiterated that the debt levels are manageable and that the company has robust financial mechanisms in place to meet its obligations. “I think we are very comfortable to address the debt. We have a good cash flow and good dividend that should take care of all the debt payment of VRM,” he said.

This statement aligns with Agarwal’s previous communications, where he consistently maintained that Vedanta is well-positioned to handle its debt through its strong cash flow and dividend payments.

Dividend Distribution: A Testament to Financial Health

Vedanta has a notable history of substantial dividend payments, reflecting its solid financial health. Over the past decade, the company has distributed nearly ₹1 lakh crore as dividends. In the financial year 2024 alone, Vedanta paid dividends worth ₹29.5, following ₹101.5 in FY2023 and ₹45 in FY2022. For FY2024, the company’s dividend yield stood at an impressive 11%.

Such consistent dividend payouts underscore Vedanta’s commitment to sharing profits with its shareholders and its strong cash flow position.

Stock Performance: A Stellar Year for Vedanta

Shares of Vedanta Ltd. Have shown remarkable performance in 2024. Trading 1.8% higher at ₹456.50, the stock has surged 78% so far this year. This marks its best calendar year performance since 2021, during which the stock more than doubled in value.

The significant rise in stock value is a testament to investor confidence and the company’s strong operational and financial performance.

Conclusion: Stability and Growth Ahead

Anil Agarwal’s recent statements provide a clear picture of stability and growth for Vedanta Ltd. The reassurance that there are no immediate plans to reduce promoter shareholding below current levels, combined with the company’s robust financial health and impressive stock performance, paints a positive outlook for the future.

Investors can take comfort in the company’s strategic direction, strong dividend history, and the management’s commitment to maintaining financial stability. As Vedanta continues to navigate the complex business landscape, it remains well-positioned to deliver value to its shareholders.