A Hindustan Zinc encumbrance disclosure posted on BSE on October 5, 2026, detailed promoter Vedanta Limited's ownership and disposal restrictions linked to its Rs 2,000 crore non-convertible debenture issue. The disclosure, dated September 30, concerns undertakings under a debenture trust deed executed on September 28, 2026.

Under the deed, Vedanta must directly remain the legal and beneficial owner of 50.1% of Hindustan Zinc's share capital on a fully diluted basis and directly control the subsidiary until full and final redemption of the debentures. It is also restricted from creating security over, or disposing of, 50.1% of Hindustan Zinc's entire issued share capital or voting rights.

Vedanta said these contractual conditions fall within the definition of encumbrance under SEBI's takeover regulations. The latest event is classified as “others” in the disclosure and arises from the ownership and disposal covenants.

Aggregate encumbered holding remains at 52.60%

The latest covenant covers 2,116,884,819 Hindustan Zinc shares, representing 50.10% of its share capital. Vedanta reported total ownership of 2,565,271,353 shares, or 60.71%.

The filing puts both the previously encumbered holding and the post-event encumbered holding at 2,222,674,417 shares, or 52.60% of Hindustan Zinc's total share capital. Across all outstanding arrangements, encumbered shares represent 86.64% of Vedanta's holding.

Vedanta explained that existing encumbrances relate to various facilities entered into by the company or its subsidiaries. Because the latest disclosure concerns covenants and undertakings, its share count is not added to the already encumbered holding to calculate the post-event total.

Debenture terms and trustee

  • The debentures were issued through private placement and are unsecured, listed, rated and redeemable.
  • Each debenture has a face value of Rs 1 lakh.
  • Axis Trustee Services Limited acts as debenture trustee on behalf of the debenture holders.
  • The instruments are listed on BSE, with ISIN INE205A08103.

The disclosure identifies September 28, 2026, as the date of creation of the latest encumbrance. Vedanta submitted it under Regulation 31 of the SEBI takeover regulations and the regulator's February 16, 2023, master circular.