Axis Trustee Services Limited, acting as the debenture trustee for Vedanta Limited, has filed a mandatory disclosure regarding the creation of an encumbrance over equity shares of Hindustan Zinc Limited (HZL). This action stems from the terms of a Debenture Trust Deed dated March 12, 2026, securing unsecured debentures totaling ₹2,575 crore. The encumbrance mandates Vedanta to maintain direct legal and beneficial ownership of 50.1% of HZL’s share capital.
Mandatory Disclosure Regarding HZL Holdings
Axis Trustee Services Limited has issued a regulatory disclosure concerning changes in the holding pattern of Hindustan Zinc Limited (HZL) shares by its client, Vedanta Limited (the “Company”). This filing, made on March 16, 2026, is pursuant to Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
Basis of Encumbrance Creation
The disclosure relates to unsecured, listed, redeemable, non-convertible debentures issued by the Company, amounting to ₹2,575 crore, with a face value of INR 1,00,000 each. A Debenture Trust Deed (DTD) was executed on March 12, 2026, governing these instruments. Under the DTD, the Company is contractually required, until full redemption, to directly remain the legal and beneficial owner of 50.1% of HZL’s share capital (on a fully diluted basis) and retain direct control over HZL.
The terms of the DTD, which restrict the Company from creating security over or disposing of 50.1% of the issued share capital or voting rights, fall under the definition of ‘encumbrance’ as defined in the Takeover Regulations.
Holding Status Before and After the Action
Before the Acquisition Consideration (Current Holding)
Prior to the specific action detailed in this report, the acquirer’s holding (along with Persons Acting in Concert, or PACs) in HZL involved:
- Pledge: 97,015,888 shares, representing 2.30% of total capital.
- Other Encumbrance (Non-disposal undertaking in relation to debentures): 2,116,884,819 shares, representing 50.10% of total capital.
Details of Acquisition (Creation of Encumbrance)
The transaction detailed is the creation of an encumbrance in relation to the debentures, specifically the Non-disposal undertaking of 2,116,884,819 shares (50.10%). This creation was effective on March 12, 2026.
Notably, a Pledge Release of 9,591,486 shares (0.23%) occurred on June 13, 2025, though this release was below the 2% threshold that typically mandates a Regulation 29(2) filing at that time (as referenced in Note 3).
Holding After the Acquisition Consideration
Following the creation of the new encumbrance stipulated by the DTD:
- Shares carrying voting rights: Nil.
- Shares in the nature of encumbrance: The total holding remains unchanged in absolute terms, reflecting the newly stipulated encumbrance structure: Pledge of 87,424,402 shares (2.07%) and Non-disposal undertaking of 2,116,884,819 shares (50.10%).
Capital Structure Context
The disclosure confirms the equity share capital and total voting capital of HZL before and after the said acquisition event (related to the creation of the encumbrance covenants) stands at 8,450,638,000 (representing 4,225,319,000 equity shares of INR 2 each), based on BSE holdings data as of March 16, 2026.
Source: BSE
