Company clarifies proxy advisor observations on postal ballot: ESOS 2026, ESOP extension, related-party deals

Company has clarified IiAS recommendations on Items 1-4 and 9 of its postal ballot notice.

Mon 12 Oct 2026

RPT with VAML (aggregate)

₹921 crore

RPT with VEDL (aggregate)

₹48.6 billion, including ₹8.42 billion of recoveries and reimbursements

ESOS 2026 grant cap

100% of the employee's annual fixed pay

What the company has said

The company has written to the stock exchanges clarifying its position on the voting recommendations issued by proxy advisory firm IiAS on Items 1 to 4 and 9 of its postal ballot notice dated September 22, 2026.

Employee stock options - Item 1

• Vesting under Vedanta ESOS 2026 is stated to be entirely performance-linked, with no time-based or guaranteed vesting; continued employment is required to be eligible
• Vesting is determined on performance measured over a minimum period of three years
• Vesting at the threshold performance level is 50% of the grant allocated to the relevant performance parameter, and is capped at 100% on overachievement; a metric that falls short of its threshold scores zero
• The grant to any employee is capped at 100% of the employee's annual fixed pay

The update sets out weightages across business performance parameters such as EBITDA, free cash flow and carbon footprint reduction, on a weighted-average basis against target EBITDA. Targets and thresholds are drawn from the annual operating plan approved by the Board. The final vesting percentage for each cycle is approved by the Nomination and Remuneration Committee, whose members are not eligible to participate in the scheme. The company says it will disclose performance targets and actual achievement levels in its future annual reports.

ESOP extension and the trust route - Items 2, 3 and 4

• The extension of ESOS 2026 covers employees of the holding company, subsidiaries and associate companies, restricted to entities with a direct strategic, operational or business linkage
• The cost of benefits is cross-charged to the entity receiving the benefit of the employee's services
• The trust acquires existing shares from the secondary market; the company states this does not result in incremental equity dilution beyond shareholder-approved limits
• Shares acquired and held by the trust are stated not to confer any immediate or assured benefit on employees

Demerger-related transactions - Item 9

Under the demerger, Jharsuguda IPP and the aluminium business were separated from Vedanta Limited (VEDL). The company states that updates to Fuel Supply Agreements, Power Purchase Agreements, registrations and related records are underway, and that certain transactions continue through VEDL and Vedanta Aluminium Metal Limited (VAML) in the interim, in the ordinary course of business.

With VAML

• Aggregate value of proposed transactions: ₹921 crore, unchanged
• Recovery of expenses: ₹505 crore
• Reimbursement of expenses: ₹330 crore
• Smaller amounts relate to purchase and sale of goods and services, and purchase and sale of assets

The company explains that categories are shown on a reciprocal basis, so a sale by VAML is a purchase by the company and vice versa, and that this is a change in direction and presentation only, not in the overall limit placed before shareholders. Purchase of power from VAML is described as being for the plant's basic internal power requirements and essential plant services during shutdowns, maintenance or other periods of non-generation.

With VEDL

• Proposed related party transactions aggregate ₹48.6 billion
• This includes ₹8.42 billion of expense recoveries and reimbursements

These arise mainly from the transfer of the Sakti Thermal Power Plant from VEDL to the company and the continuation of certain contractual, administrative and operational arrangements during the transition. The company states these transactions are meant to ensure business continuity and an orderly transition to the new operating structure.

What a shareholder may take away

The letter is the company's response to a proxy advisory firm's observations ahead of a postal ballot. It explains how the employee stock option scheme is designed, why group-company employees are included, why a trust route is used to buy shares from the market, and how the demerger-related related-party transactions with VAML and VEDL are presented.

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