Vedanta Limited — Pledging, 24-07-2026: Pledge/Unpledge

Vedanta's promoter group has placed a significant portion of their Vedanta Ltd (VEDL) shares under 'encumbrance.' This means certain conditions are now attached to these shares, effectively restricting their disposal or the creation of further security interests, though no direct pledge has been made as of the disclosure date. These conditions will become active upon the execution of relevant supplemental trust deeds.

This action is to secure newly issued bonds totaling US$ 1.75 billion by Vedanta Resources Finance II PLC, a subsidiary of Vedanta Resources Limited (VRL). The funds raised from these bonds are primarily intended for repaying outstanding bonds and servicing other debts.

The encumbrance covers approximately 2.14 billion shares of VEDL, accounting for 54.72% of VEDL's total share capital. This represents nearly 100% of the promoter group's existing holding in VEDL. Key entities involved in this arrangement are Twin Star Holdings Ltd., Welter Trading Limited, Vedanta Holdings Mauritius II Limited, Vedanta Holdings Mauritius Limited, and Vedanta Netherlands Investments B.V., with GLAS Agency (Hong Kong) Limited acting as the security trustee for the bondholders.

A crucial condition requires the VRL Group to maintain at least 50.1% ownership of VEDL. The terms also restrict the promoter group's ability to dispose of these shares or create other security interests, particularly in the event of a bond default. Investors should note that the new bonds carry sub-investment grade credit ratings (Ba3 from Moody's, BB from Fitch, and BB- from S&P Global).