Promoter discloses encumbrance over 50.10% of subsidiary's shares linked to ₹2,000 crore debentures

Promoter Vedanta Limited has disclosed creation of an encumbrance over 50.10% of Hindustan Zinc's share capital, effective September 28, 2026.

Mon 5 Oct 2026

Encumbrance created

2,11,68,84,819 equity shares, or 50.10% of the total share capital of Hindustan Zinc

Promoter holding

2,565,271,353 shares, or 60.71% of total share capital

Encumbered shares after event

2,222,674,417 shares, or 52.60%

Debentures issued

unsecured, listed, rated, redeemable, non-convertible debentures of ₹ 2,000 Crore (face value ₹ 1,00,000 each) on a private placement basis

All outstanding encumbrances (1 to 10)

86.64% of the promoter's shareholding

Vedanta Limited, the promoter of Hindustan Zinc Limited, has reported the creation of an encumbrance over a block of Hindustan Zinc shares equal to half of the company's share capital. The event is dated September 28, 2026 and was reported to the exchanges on September 30, 2026.

What was disclosed

• Vedanta Limited is the promoter on whose shares the encumbrance has been created.
• The encumbrance covers 2,11,68,84,819 equity shares, or 50.10% of the total share capital of Hindustan Zinc.
• The update describes the type of encumbrance for this event as "Others" and refers to the covenants in the Debenture Trust Deed.
• The shares are encumbered in favour of Axis Trustee Services Limited, acting as the debenture trustee on behalf of the debenture holders named in the update.

Why the encumbrance was created

• Vedanta Limited has issued unsecured, listed, rated, redeemable, non-convertible debentures of ₹ 2,000 Crore, each with a face value of ₹ 1,00,000, on a private placement basis.
• A Debenture Trust Deed dated September 28, 2026 has been executed between Vedanta and Axis Trustee Services Limited as the debenture trustee.
• Under that trust deed, until the debentures are fully and finally redeemed, Vedanta must directly remain the legal and beneficial owner of 50.1% of Hindustan Zinc's share capital on a fully diluted basis, and must directly control Hindustan Zinc.
• Vedanta is also restricted from creating any security over, or disposing of, 50.10% of the entire issued share capital or voting rights of Hindustan Zinc.
• The update states these conditions fall within the definition of "encumbrance" under Chapter V of the Takeover Regulations.

How the numbers stack up

• Promoter holding in Hindustan Zinc: 2,565,271,353 shares, or 60.71% of total share capital.
• Promoter holding already encumbered: 2,222,674,417 shares, or 52.60%.
• Encumbrance created in this event: 2,11,68,84,819 shares, or 50.10%.
• Post-event holding of encumbered shares: 2,222,674,417 shares, or 52.60%.
• The update explains that the post-event encumbered holding does not equal the sum of the already-encumbered holding and the new event, because the new covenant-based encumbrance overlaps with existing ones.
• Taken together, all outstanding encumbrances from 1 to 10 equal 86.64% of the promoter's shareholding, and the update answers YES both to whether encumbered shares are 50% or more of promoter shareholding and to whether they are 20% or more of total share capital.

What it means in simple terms

• An encumbrance means the promoter's shares carry a restriction. Here it is a commitment to keep holding, and not to dispose of or create security over, a defined block of Hindustan Zinc shares.
• The restriction remains in place until the debentures are fully redeemed.
• For a retail investor, the disclosure shows how much of the promoter's stake is committed to lender and debenture-holder covenants.
• The disclosure has been made by the promoter under Regulation 31 of the Takeover Regulations.

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