Axis Trustee Discloses Pledge On 2.29% Hindustan Zinc Stake Amid Debenture Terms
By Ankur Chandra | Updated at: Jun 6, 2025 04:32 PM IST
Axis Trustee Services Ltd. (ATSL), acting as a debenture trustee, has disclosed the creation of an encumbrance over 9.70 crore equity shares of Hindustan Zinc Limited (NSE: HINDZINC, BSE: 500188), amounting to 2.29% of the company’s total share capital, under Regulation 29(2) of SEBI’s Substantial Acquisition of Shares and Takeovers (SAST) Regulations, 2011.
What Has the Company Disclosed?
- Type of Encumbrance: Pledge and non-disposal undertaking
- Shares Pledged: 9,70,15,888 equity shares
- Shareholding Impact: Represents 2.29% of Hindustan Zinc’s equity capital
- Other Encumbrance: Non-disposal undertaking over 2,11,68,84,819 shares (50.10% stake)
- Date of Transaction:
- May 2, 2025 – 54.22 lakh shares pledged (1.28%)
- June 3, 2025 – Additional encumbrance created linked to debenture terms
What’s the Reason Behind the Move?
According to the disclosure, Vedanta Ltd., the parent company of Hindustan Zinc, has issued ₹5,000 crore worth of unsecured, listed, rated, non-convertible debentures via private placement. Axis Trustee Services has been appointed as the debenture trustee under a Debenture Trust Deed (DTD) signed on June 3, 2025.
As per the DTD covenants: “The Company is required to directly remain the legal and beneficial owner of 50.1% of the share capital of Hindustan Zinc Limited and is restricted from creating any security over or disposing of this stake.”
While no pledge has been created directly against the 50.1% block in relation to these debentures, the restriction qualifies as an encumbrance under SEBI norms.
Share Capital Status (as of June 5, 2025)
| Particulars | Number of Shares | % of Voting Capital |
|---|---|---|
| Equity Share Capital | 4,22,53,19,000 | 100% |
| Shares Pledged (Latest) | 9,70,15,888 | 2.29% |
| Shares Under Non-Disposal Undertaking | 2,11,68,84,819 | 50.10% |
What Are the Compliance Highlights?
Earlier, Vedanta had pledged 54.22 lakh shares (1.28%) in May 2025, which did not require a SEBI disclosure as it was below the 2% threshold. However, the cumulative pledge and encumbrance crossing the regulatory threshold necessitated this filing.
Strategic Context
The development also comes at a time when Vedanta is aggressively restructuring its debt through asset-backed instruments. Maintaining control of HZL is key to Vedanta’s cash flow management, as Hindustan Zinc remains one of its most profitable subsidiaries.
This development ensures compliance with SEBI’s disclosure norms and signals continued lender oversight over promoter shareholding patterns amidst Vedanta’s financial engineering efforts.
REF: https://www.bseindia.com/xml-data/corpfiling/AttachLive/EB3F7F88_FCB2_4112_9838_836ECCFD6C25_121140.pdf
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