Shares of Vedanta Limited are once again in focus after the company announced a second interim dividend for the financial year 2025-26. The development comes at a time when the mining and metals giant is facing multiple legal and regulatory hurdles.
While the dividend news has cheered investors, ongoing scrutiny by regulators and government authorities has created uncertainty about the company’s near-term outlook.
Vedanta Share A Generous Dividend Boosts Investor Sentiment
On Thursday, Vedanta’s board of directors approved a second interim dividend of ₹16 per share for FY26. This comes after the company declared a first interim dividend of ₹7 per share in June. The record date for the latest payout has been fixed as August 27, 2025, which means shareholders holding the stock on this date will be eligible for the dividend.
Over the past 12 months, Vedanta has announced a total dividend of ₹35.50 per share, making it one of the top dividend-paying companies in India. At current share price levels, the dividend yield is considered highly attractive, positioning Vedanta as a strong choice for income-seeking investors.
This announcement is particularly important because it sends a positive message to the market. Despite challenges, Vedanta is showcasing its ability to generate healthy cash flows and reward shareholders. Analysts say the dividend declaration has helped support the stock in recent sessions.
Demerger Plan Faces Strong Opposition
While the dividend news was welcomed, Vedanta’s proposed demerger plan has run into major trouble. The company had earlier announced a plan to separate its key business units in an effort to unlock shareholder value. However, the National Company Law Tribunal (NCLT) recently deferred its hearing on the matter to September 17, 2025, after receiving strong objections from the Ministry of Petroleum and Natural Gas.
The ministry raised concerns that the demerger could negatively impact the government’s ability to recover dues owed by the company. It also alleged that Vedanta had failed to disclose critical details and had attempted to conceal important information in its proposal.
Adding to the complications, the Securities and Exchange Board of India (SEBI) has issued a warning letter to Vedanta, accusing the company of altering its demerger scheme after approvals were granted. SEBI has called this a “serious breach,” further raising doubts about the company’s governance practices. These developments have created significant uncertainty around the demerger process, which was earlier seen as a key move for long-term value creation.
Legal Setbacks Add to Pressure
In addition to regulatory hurdles, Vedanta also suffered a legal setback in the Supreme Court. The apex court recently dismissed the company’s plea for additional compensation related to its Talwandi Sabo Power project in Punjab. Vedanta was seeking “deemed export” benefits, but both the Appellate Tribunal for Electricity (APTEL) and the Supreme Court ruled against the company, stating that it was not legitimately entitled to such benefits.
This decision marks another blow for Vedanta, which has been involved in multiple litigations across its power and resources businesses. Legal disputes not only create financial risks but also weigh on investor confidence, especially at a time when regulatory scrutiny is already at a peak.
Vedanta Strong Operations but Mixed Financial Results
Despite these challenges, Vedanta’s core operations have continued to perform well. In the first quarter of FY26, the company posted its highest-ever Q1 EBITDA at ₹10,746 crore, which represented a 5% increase compared to the same period last year. Revenue from operations also rose 5.75% year-on-year to ₹37,824 crore.
However, the bottom line told a different story. Vedanta’s consolidated net profit declined by 11.7% year-on-year to ₹3,185 crore. The fall in profit, despite higher revenue, was attributed to rising costs and one-off expenses linked to its ongoing disputes and restructuring plans.
The stock has reflected this mixed picture. While the dividend news sparked a short-term rally, concerns over the NCLT’s demerger decision and SEBI’s warning have pressured the stock. Analysts remain cautiously optimistic, with many maintaining a “buy” rating on Vedanta. The average one-year price target currently stands at around ₹504.60, but experts warn that the outcome of the September NCLT hearing and future regulatory decisions will play a critical role in determining the stock’s direction.
Conclusion
Vedanta’s latest dividend announcement highlights the company’s strength in rewarding its shareholders, but the road ahead looks challenging. With legal setbacks, regulatory pressure, and questions over its demerger plan, the company faces a tough balancing act. Investors will be closely monitoring the upcoming NCLT hearing and SEBI’s stance, as these outcomes could significantly impact Vedanta’s growth strategy and stock performance in the coming months.
F.A.Q.
– What dividend has Vedanta recently announced?
Vedanta has declared a second interim dividend of ₹16 per share for FY26, with the record date set as August 27, 2025.
– How much total dividend has Vedanta paid in the last 12 months?
The company has paid a total dividend of ₹35.50 per share in the past year, making it one of the highest dividend-paying stocks in India.
– Why has Vedanta’s demerger plan been delayed?
The National Company Law Tribunal (NCLT) deferred the demerger hearing to September 17, 2025, after the Ministry of Petroleum and Natural Gas raised objections, citing risks to government dues recovery and lack of full disclosure.
– What action has SEBI taken against Vedanta?
SEBI issued a warning letter accusing Vedanta of altering its demerger scheme after receiving prior approvals, calling it a “serious breach.”
– How is Vedanta performing financially despite these challenges?
In Q1 FY26, Vedanta reported its highest-ever quarterly EBITDA of ₹10,746 crore and revenue of ₹37,824 crore, though net profit declined 11.7% year-on-year to ₹3,185 crore.
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