Metals and mining giant Vedanta declared a second interim dividend of Rs 19.5 per share on Tuesday, bringing its total payout in two dividend rounds declared so far in FY23 to Rs 18,960 crore. This is higher than the total dividend it paid of Rs 16,740 crore in FY22, data compiled by the BS Bureau of Research showed.

Vedanta’s move comes after its subsidiary Hindustan Zinc declared an interim dividend of Rs 21 per share last week. Hindustan Zinc had said its dividend payment would result in an outflow of Rs 8,873 crore. Vedanta holds a 64.9% stake in Hindustan Zinc, while the Indian government holds a 29.5% stake in the company.

On the other hand, Vedanta’s current dividend payment will result in an outflow of Rs 7,250 crore; it informed the stock exchange on Tuesday. In April, the company declared its first interim dividend of Rs 31 per share, resulting in an outflow of Rs 11,710 crore.

Vedanta’s dividend announcement comes as Vedanta Resources owns 69.7% of Vedanta and has been looking to deleverage its balance sheet.

Rating agency Moody’s said in a recent report that the holding company (Vedanta Resources) had set a target of $4 billion (Rs 32,000 crore at current exchange rates) by deleveraging over the next three years.

In April, Vedanta declared an interim dividend of 31.5 rupees per share, with an outflow of Rs 11,710 crore (or $1.56 billion), Moody’s said. Its holding company, Vedanta Resources, received Rs 8,162 crore (or $1.08 billion).

“The large cash dividend is good for Vedanta Resources as it avoids some of the liquidity and refinancing risks associated with the maturity of the holding company’s H1FY23 debt,” Moody’s said.

Vedanta was the highest dividend payer in FY22, followed by TCS, ONGC, HCL Tech, Indian Oil Corporation, Hindustan Unilever, Hindustan Zinc, ITC, SBI and Reliance Industries in the top 20.

Cumulatively, the dividend payout of the top 20 in FY22 is Rs 1.66 trillion, equivalent to a dividend payout ratio of 37.18%, which is higher than the dividend payout ratio of 35.55% in FY21.

Analysts and corporate governance experts told Business Standard that FY23 is likely to mirror FY22 trends as some companies grapple with a lack of good investable opportunities, forcing them to reallocate profits into dividends. Still, others want to continue to reward their shareholders, such as governments, who are key stakeholders in the company. Some other players are looking to help their parent companies deleverage their balance sheets.

Vedanta closed at Rs 238.60 per share on the BSE on Tuesday, up just 0.51% from the previous day’s close. On the other hand, subsidiary Hindustan Zinc rose 1.72% to Rs 298.60 per share of the prior day’s close.