Zee Business' Hindustan Zinc dividend payout estimates spot-on! Vedanta to benefit too, says Anil Singhvi

The Q2 results of Hindustan Zinc for the financial year 2020-21 (April-March) have been declared and the dividend payout declared by the company is close to what Zee Business predicted. The September quarter results of this company have also been good. So, how will this announcement impact the dividend payouts that is expected from Vedanta? Zee Business Managing Editor Anil Singhvi has the answer for you!  

At 10 am, Hindustan Zinc stocks were trading around Rs 222, up by almost 0.9 per cent from the last closing.

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हिंदुस्तान जिंक देगी ₹21.30 का डिविडेंड...

सटीक रही ज़ी बिज़नेस की एक्सक्लूसिव रिसर्च...

अनिल सिंघवी- हिंदुस्तान जिंक के मजबूत नतीजे और अच्छे डिविडेंड से वेदांता को फायदा, वेदांता का डिविडेंड भी आना संभव... शेयर होगा और मजबूत#EditorsTake #HindustanZinc #Vedanta @AnilSinghvi_ pic.twitter.com/1GpxMAaiZV

— Zee Business (@ZeeBusiness) October 21, 2020

The results of Hindustan Zinc were on expected lines, Singhvi said. The dividend announced by the company is Rs 21.30. Zee Business’ estimates were quite close to the actual number. But there is a learning in this, which is that fundraising may not always be for paying out dividends. The company had recently raised money, causing speculation that the money could be used for paying out dividend to the investors. 

The payout is significant, the Market Guru said adding that this augurs well for the stocks. This stock is only available in the cash market and not in the futures and options.  

This news is certainly expected to impact Vedanta, Singhvi said. The ADR closed up by 5-6 per cent on Tuesday. The dividend will also go to Vedanta Plc, which is the promoter company and it is expected that it will also declare its dividend. 

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The Market Guru said that there is a strong support at Rs 95 for Vedanta. Zee Business was of the view that this stock will settle around Rs 90-95, after the delisting exercise failed. If the markets remain supportive, this stock could go up to Rs 110-Rs 115. The worst is behind for the company now and by the time the dividend comes, this stock could outperform, Singhvi said.