Promoter Vedanta creates fresh encumbrance over 50.10% stake for ₹2,000 Crore debentures

Promoter Vedanta Ltd has disclosed a new encumbrance over Hindustan Zinc shares under SEBI takeover rules.

Thu 1 Oct 2026

Debenture Issuance Amount

₹ 2,000 Crore

Face Value per Debenture

₹ 1,00,000

Shares Covered by Encumbrance

2,116,884,819 shares (50.10% of share capital)

Promoter Total Shareholding

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

Encumbered Promoter Holding Percentage

86.64% of promoter shareholding

What was shared

Vedanta Limited, the promoter of Hindustan Zinc, shared a disclosure under Regulations 31(1) and 31(2) of the SEBI Takeover Regulations about an encumbrance created on Hindustan Zinc shares.

The borrowing behind it

Vedanta 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. Axis Trustee Services Limited is the Debenture Trustee, and a Debenture Trust Deed was executed on September 28, 2026. The debentures are listed on BSE Limited and rated by ICRA.

What the covenant requires

• Until full and final redemption, Vedanta must directly remain the legal and beneficial owner of 50.1% of HZL's share capital on a fully diluted basis, and directly control HZL.
• Vedanta is restricted from creating any security over, or disposing of, 50.1% of HZL's issued share capital or voting rights.
• These covenants fall within the definition of "encumbrance" under the Takeover Regulations. The event type recorded is "Others" — no pledge was created in this event.

The numbers

• Promoter holding in Hindustan Zinc: 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: 2,116,884,819 shares, or 50.10%.
• Post-event encumbered holding: 2,222,674,417 shares (52.60%). Because this event arises from covenants rather than a separate security creation, the post-event figure does not add up as a simple sum.
• Encumbered shares as a percentage of promoter shareholding: 86.64%, counting all outstanding encumbrances listed from 1 to 10.

Context of earlier encumbrances

The update lists ten existing encumbrance events dating back to March 30, 2022, in favour of entities such as SBICAP Trustee Company Limited, Citicorp International Limited, Axis Trustee Services Limited and IDBI Trusteeship Services Limited. Several of these also cover 2,11,68,84,819 shares (50.10%) through similar covenants. Earlier pledge releases are also detailed, including 1,018,301,879 shares (24.10%) released on 20-Aug-26 and 51,564,661 shares (1.22%) released on 18-Sep-26, both in favour of SBICAP Trustee Company Limited.

How to read it

This is a promoter-level financing arrangement. The borrowing is by Vedanta Limited, not by Hindustan Zinc, and the stated purpose is in connection with the Debenture Trust Deed dated September 28, 2026 — recorded as neither personal use by promoters nor for the benefit of the listed company. For minority shareholders, the covenant has the effect of requiring Vedanta to retain majority ownership and control of Hindustan Zinc while the debentures remain outstanding. Investors typically watch the level of promoter encumbrance, here 86.64% of promoter holding, as an indicator of promoter-level leverage.

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