Promoter Vedanta creates fresh encumbrance over 50.10% of share capital for Rs. 2,000 Crore debentures

Promoter Vedanta Limited has told the exchanges about a new encumbrance on its Hindustan Zinc shares.

Thu 1 Oct 2026

Debenture Issuance Amount

Rs. 2,000 Crore

Encumbered Shares

2,11,68,84,819 shares (50.10% of total share capital)

Vedanta Total Holding

2,565,271,353 shares (60.71%)

Post-Event Encumbered Holding

2,222,674,417 shares (52.60%)

Trustee Entity

Axis Trustee Services Limited

What was shared

Vedanta Limited, the promoter of Hindustan Zinc Limited (HZL), made a disclosure under Regulations 31(1) and 31(2) of the SEBI Takeover Regulations, reported on September 30, 2026.

Why the encumbrance arose

Vedanta has issued unsecured, listed, rated, redeemable, non-convertible debentures of Rs. 2,000 Crore, each with a face value of Rs. 1,00,000, on a private placement basis. Axis Trustee Services Limited is the Debenture Trustee, and a Debenture Trust Deed was executed on September 28, 2026.

Under the deed, until the debentures are fully redeemed, Vedanta must directly remain the legal and beneficial owner of 50.1% of HZL's share capital (fully diluted) and directly control HZL. Vedanta is also restricted from creating any security over, or disposing of, 50.10% of HZL's issued share capital or voting rights. Because of these covenants, the arrangement falls within the definition of "encumbrance" under Chapter V of the Takeover Regulations. The type of event is recorded as "Others" - a covenant-based restriction, not a transfer of shares.

The numbers

• Vedanta's holding in HZL: 2,565,271,353 shares, or 60.71% of total share capital.
• Already encumbered before this event: 2,222,674,417 shares, or 52.60%.
• Shares covered by this event: 2,11,68,84,819 shares, or 50.10% of total share capital.
• Post-event encumbered holding: 2,222,674,417 shares (52.60%).
• Entity in whose favour: Axis Trustee Services Limited, as Debenture Trustee for the debenture holders.

The update explains that because this encumbrance stems from covenants and undertakings, the post-event encumbered figure does not add up as a simple sum of the earlier encumbered shares plus this event's shares - the same shares are covered under overlapping arrangements.

Existing encumbrances

The annexure lists ten existing encumbrance events, dated from March 30, 2022 to September 28, 2026, including pledges and non-disposal undertakings in favour of trustees such as SBICAP Trustee Company Limited, Citicorp International Limited, IDBI Trusteeship Services Limited and Axis Trustee Services Limited. All outstanding encumbrances together represent 86.64% of promoter shareholding. The update confirms encumbered shares are 50% or more of promoter shareholding and 20% or more of total share capital.

The update also lists past pledge releases under one facility, including 1,015,301,579 shares (24.10%) on 10-Aug-26 and 51,564,661 shares (1.22%) on 18-Sep-26, in favour of SBICAP Trustee Company Limited.

How to read this

This relates to the promoter's own borrowing at the Vedanta Limited level, not to borrowing by HZL. HZL's shareholding pattern and operations are not changed by the event; what changes is a restriction on how Vedanta may deal with its 50.10% stake. The debenture holders at allotment included Barclays Bank PLC, Standard Chartered Bank, Kotak Mahindra Bank and several mutual fund schemes. The debentures are listed on BSE Limited and rated by ICRA, with ISIN INE205A08103. The purpose stated is in connection with the Debenture Trust Deed dated September 28, 2026.

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