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Vedanata zooms 9% on windfall tax cut and dividend

Vedanata zooms 9% on windfall tax cut and dividend

Vedanata zooms 9% on windfall tax cut and dividend
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By CNBCTV18.com Jul 20, 2022 1:51:54 PM IST (Published)

Mining major Vedanta's shares have jumped as much as 9 percent in trade on Wednesday. Here's why

Vedanta share price zoomed 9 percent in intra-day deals on Wednesday, hitting a one-month high of Rs 259.80 as the reduction of the windfall tax on crude production along with the mining major declaring a dividend of Rs 19.50 per share boosted sentiment. The stock has surged nearly 11 percent for the last four days.

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The government on Wednesday reduced the windfall tax — a higher tax rate on sudden big profits which is levied on a particular company or industry — on crude, Aviation Turbine Fuel (ATF), petrol and diesel exports.
The windfall tax cut benefits Vedanta's Cairn Oil & Gas, which produces around 24 percent of the total crude oil in India and reduced tax outgo aids in profitability.
In addition to the windfall tax cut, Vedanta has declared a dividend (its second interim dividend) of Rs 19.50 per equity share amounting to Rs 7,250 crore with July 27 as the record date.
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Back in April 2022, Vedanta had approved an interim dividend of Rs 11,710 crore ($1.56 billion) of which $1.02 billion will be received by its holding company Vedanta Resources Ltd (VRL). VRL owns 69.7 percent of Vedanta Ltd.
Known as a high dividend-paying stock, Vedanta has paid Rs 96 per share in FY21-22. To put into perspective, an investment of Rs 1 lakh in Vedanta at Rs 62 per share (fetching a total of 1612 shares) on April 3, 2020, would have turned into Rs 4.15 lakh at the current market price of Rs 257.
On top of that, with a dividend payment of Rs 96 per share, Vedanta gave an additional income of Rs 1.54 lakh as well to its shareholders.
What is a dividend?
A dividend is usually a part of the profit that the company shares with its shareholders. Dividends can be paid in cash, stocks, or any other form that a company chooses. Dividends are often distributed quarterly.
Through interim dividends paid out every quarter, final dividends paid out at the end of the year, and sporadic special dividends, Vedanta has been giving money back to shareholders.
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