The shares of Vedanta Ltd. remained close to their 52-week high after the company announced ambitious plans for capacity expansion and debt reduction at its parent company through dividend payments.

The mining company guided it to reduce debt with the promoter entity from $9 billion to $5 billion in three years, largely driven by dividends from Vedanta, it said at an analyst meeting on March 17. That implies more than $2 billion in annual dividends.

According to analysts, the company’s key growth projects include expanding aluminum capacity from 2.2 million tons to 3 MT, Hindustan Zinc Ltd. from 1 MT to 1.2 MT, Zinc International from 250 kt to 500 kt and oil from 160 kboepd to 300 kboepd in FY24. Vedanta also plans to produce 7 kt nickel in FY24.

Shares of Vedanta rose 4.7% in early trading Monday. The stock hit an intraday high of Rs 396.3 each, close to its 52-week high of Rs 404.

Of the 18 analysts following the company, 12 are holding a “buy,” four are proposing a “hold” and two are recommending a “sell,” according to Bloomberg data. The consensus price target for 12 months implies an increase of 12.1%.


This post Vedanta Stocks Benefit From Growth, Dividend Payout Plans was original published at “https://www.bloombergquint.com/business/vedanta-shares-gain-on-growth-dividend-payout-plans”

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