Vedanta Rs 18.5 interim dividend: Whats in store for futures investors, how would it impact stock price, who will get dividend and what is the Math behind? Anil Singhvi DECODES

Vedanta dividend latest news: In a special edition of Editor’s Take, Zee Business Managing Editor and the Market Guru Anil Singhvi explains how Vedanta’s dividend announcement will be beneficial to Futures market investors along with the cash market and what would the stock price reaction and how one can avail this dividend.

Singhvi says, Rs 18.5 per share first interim dividend of Vedanta is good, he adds those who want to avail this dividend should have a delivery of the company shares in their Demat account at least till record date, which is decided as of September 9, 2021, by Vedanta.

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He explains, if a dividend price is 5 per cent higher than the closing price of the company’s share at the time of dividend announcement then it is termed as a special dividend, which is also somehow applicable and beneficial to the futures market too.

In Vedanta’s case, Singhvi says, the closing price of the company at the time of announcement was around Rs 298 per share and dividend announced was at Rs 18.5 per share. 

He adds, the moment the ex-dividend date is announced which is generally a couple of days before the record date, the market sees a reduction in the share price to that of dividend price. For example, Rs 298 closing of the share price on Wednesday subtracted by Rs 18.5 dividend price = Rs 280 per share.

The market guru mentions, this phenomenon is also applicable in the futures market, however, the futures investors get a credit of the same dividend amount, which means there will be no price loss, this doesn’t mean futures investors get a dividend.

And, eventually, the futures investors won’t bear the loss of reduction in share price as against the investors and traders in the cash market, the managing editor adds further.

With respect to the stock price movement, the market guru says, Vedanta shares, in the last two weeks, have touched a high of Rs 340 per share and corrected to Rs 260 per share, almost all commodities shares saw a correction in the last couple of weeks.

The correction is perhaps investors were assuming some big development or maybe on the back of dividend expectations. He adds, if a company defers dividend board meet that doesn’t mean the company doesn’t have cash, this same happened with BPCL too, they eventually declared it. 

The managing editor also points out that there is nothing to worry about with respect to Vedanta, and on the back of dividend news the stock would zoom for 10-15 per cent or may see profit booking.

He adds in the long-term, Vedanta looks good. It has achieved a target of Rs 320 apiece and will soon hit two other targets of Rs 375 and Rs 400 per share, adding further that we will review the stock after achieving the target seeing the commodity market’s mood and sentiment.

Before concluding, the managing editor advises book profit whenever it’s a good time and try to enter again seeing the metal’s sentiment and mood.