High dividends mask Vedanta’s weak stock performance

Shares of Vedanta Ltd ended Monday’s (September 15) session at ₹454.40 on NSE, nearly unchanged from a year ago as concerns persist over delays in its proposed demerger into five listed entities. The stock has been largely range-bound despite being the highest dividend-yielding private company in India.

Even so, the counter managed to deliver a total return of 7.4% over the past year, thanks to generous shareholder payouts. Vedanta has already announced a dividend of ₹23 per share for FY26, after

doling out ₹43.50 per share last year. However, despite this largesse, the stock posted negative returns in two of the last three years through 2024. Total return reflects stock price performance along with dividends paid during the period.

The mining-to-metals conglomerate currently offers a 12-month dividend yield of 6.9% — the highest among Nifty200 companies, excluding PSUs. By comparison, the Nifty50 dividend yield stands at just 1.3%, Bloomberg data shows. Since FY22, Vedanta has distributed a massive ₹91,200 crore in dividends, with its promoter pocketing nearly ₹59,000 crore.

In FY25, Vedanta reported a net profit of ₹14,988 crore, a three-and-a-half-fold jump from the previous year, on revenues of ₹1.5 lakh crore, up 6.3%. Even so, the stock has lagged amid concerns over its diversification strategy. Its recent emergence as the winning bidder for bankrupt Jaiprakash Associates has also fuelled worries about capital allocation into “unrelated businesses.”

Also Read: Vedanta shares head into an important week with two triggers in sight

According to brokerage Nuvama, Vedanta should prioritise deleveraging rather than fresh acquisitions. “We consider this event negative for minority shareholders even if the assets prove to be lucrative in the future in case they get monetised,” it said in a note.

On a positive note, Vedanta resolved its long-standing dispute with China’s SEPCO Electric Power Construction Corp over its power business. “The settlement agreement provides for full and final resolution of all claims and counterclaims, including withdrawal of pending arbitration proceedings,” the company said in an exchange filing.

The drag was also visible in subsidiary Hindustan Zinc, where shares have fallen 7.3% over the past year, with a dividend yield of 4.3% providing some cushion to the decline.