Vedanta Limited has formally announced the Seventh Deed of Variation to its ESOS Trust, effective May 1, 2026. This strategic move follows the company’s recent business demerger. The company has appointed new trustees and modified the Trust Deed to ensure seamless administration of employee stock option plans across the residual entity and the newly formed Resulting Companies. This transition safeguards the economic value of equity incentives for all eligible employees.
Strategic Trust Re-constitution
Following the demerger of specific business verticals, Vedanta Limited has taken proactive steps to align its employee stock option framework with its new corporate structure. As of May 1, 2026, the Vedanta Limited ESOS Trust has undergone significant modifications. This includes the appointment of new trustees, Mr. Rahul Arora and Ms. Preet Sethi, to oversee the trust’s functions alongside Mr. Manmeet Singh.
Impact on Employee Stock Options
The demerger process involves four key resulting entities: Vedanta Aluminium Metal Limited, Malco Energy Limited (to be renamed Vedanta Oil and Gas Limited), Vedanta Iron and Steel Limited, and Talwandi Sabo Power Limited (to be renamed Vedanta Power Limited). To maintain continuity, these companies have implemented special purpose demerger schemes. The Trust will facilitate the secondary acquisition of equity shares for these entities to ensure that Pre-Demerger Option Grantees—whether retained or transferred—do not face dilution of their existing incentives.
Operational Enhancements
The revised Trust Deed introduces robust mechanisms to manage these schemes independently. Key updates include:
- Operational Autonomy: The Trust will administer each scheme as a functionally separate arrangement, preventing the commingling of assets or liabilities across different company schemes.
- Secondary Market Acquisitions: The Trust is authorized to utilize loans sanctioned by the Board of Directors of the respective Resulting Companies to acquire shares from the secondary market.
- Indemnity and Governance: Strengthened provisions ensure the protection of the Trustee, while clarifying that each Post-Demerger Company remains responsible for its own specific obligations, keeping their financial duties separate and independent.
These governance updates ensure that the transition remains compliant and protective of the interests of all beneficiaries during the post-demerger phase.
Source: BSE
