Vedanta has always been a special stock for those investing in the stock market. The biggest reason for this is the huge dividend received from the company. But now the face of this giant company is going to change completely. Vedanta is being divided (demerger) into five different companies. In such a situation, fear has settled in the mind of every common investor, who has invested his hard-earned money in this stock only in the hope of dividend. The biggest question is whether after this split, the rain of dividends for which Vedanta is famous in the market will stop?
You will get 4 new shares for 1 share
Under this demerger of Vedanta, the company is being divided into five parts. Its simple mathematics is that if you currently hold one share of Vedanta, you will get one share each of the four new companies. These new companies include Vedanta Aluminum Metal, Vedanta Power, Vedanta Oil and Gas and Vedanta Iron and Steel. The record date for this entire process was fixed as May 1, 2026. However, due to the market being closed, the impact of this demerger on share prices was visible only on April 30. After this change, shares of five different companies will start appearing in investors’ portfolios instead of one.
Why are investors scared about dividends?
There are many companies in the market, but Vedanta is recognized as a ‘dividend machine’. Even at present, the dividend yield of the company is more than 10 percent, which is much higher than the returns of any normal fixed deposit. This year in March 2026, the company had declared an impressive interim dividend of Rs 11 per share for the financial year 2026. Now that this huge company is being divided into five pieces, shareholders are worried that their regular cash income may be reduced forever.
Which business will generate bumper income?
According to a Mint report, all the five companies coming into existence after the division will work completely independently. Every company will have its own debt, its own investment plans and its dividend distribution policy will also be different. This simply means that equal returns cannot be expected from all companies. Experts believe that the business of Zinc, Oil & Gas and Iron Ore generates excellent cash flow. Therefore, companies working in these sectors can fill investors’ pockets with dividends in future also. On the other hand, huge capital will be required to expand the business of aluminium, power and steel and to repay the debt. In such a situation, these companies can invest a large part of their profits in business expansion instead of distributing them as dividends in the near future.
Will money stop coming completely?
If you are thinking that after the demerger, the dividend received from Vedanta will completely stop, then it is not so at all. There is little possibility of any sudden sharp decline in the total dividend. Yes, there will definitely be a big change in the way it is received. Now instead of getting a huge amount from one place, you will get the dividend in pieces based on the financial condition of five different companies. The company which has good earnings and less debt will give you excellent returns.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
