Shares of Hindustan Zinc soared 14 per cent, while that of parent Vedanta advanced over 5 per cent in trade after the subsidiary announced a dividend of Rs 24 per share, or 1,200 per cent, the highest ever by any private company in India.
The massive dividend announced by the zinc maker would result in a cash outflow of nearly Rs 12,2015 crore from the company's balance sheet. The amount would include the dividend distribution tax (DDT).
Tracking the development, The stock rose 14.07 per cent to hit a high of Rs 199.80 on BSE. Parent Vedanta, which holds 2,74,31,54,310 shares, or 64.92 per cent stake in the company, also advanced 5.17 per cent to Rs 96.45. The government too will gain from the announcement as it held 29.54 per cent stake in the company. Just 0.84 per cent of Hindustan Zincs 'stake is with investors with up to Rs 2 lakh investments.
While the actual dividend will amount to Rs 10,141 crore, the company would pay Rs 2,064 crore towards the DDT.
The record date for the dividend payment will be April 7, 2016. The special dividend announced by the company is in addition to the first interim dividend paid (Rs 3.80 per share or 190 per cent) in October 2015 of Rs.1,932 crore, including dividend distribution tax.
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