Vedanta Resources Limited (VRL), the promoter of Vedanta Limited (VEDL), has announced the release of encumbrance over 220.5 crore equity shares of Vedanta Limited, representing 56.38% of the total share capital. This significant development follows the full repayment of a USD 200 million facility agreement, for which a no-objection certificate was received from Canara Bank London Branch on July 3, 2025. The disclosure was made on July 5, 2025, in compliance with Regulation 31 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
| Promoter Entity | Number of Shares Released | % of Total Share Capital |
|---|---|---|
| Twin Star Holdings Ltd. | 1,564,805,858 | 40.02% |
| Welter Trading Limited | 38,241,056 | 0.98% |
| Vedanta Holdings Mauritius Limited | 107,342,705 | 2.75% |
| Vedanta Holdings Mauritius II Limited | 492,820,420 | 12.60% |
| Vedanta Netherlands Investments B.V. | 1,514,714 | 0.04% |
| Total Shares Released | 2,204,724,753 | 56.38% |
Action Details and Background
The release of encumbrance pertains to a facility agreement dated June 28, 2022, which involved Twin Star Holdings Ltd. as the borrower, and Vedanta Resources Limited and Welter Trading Limited as guarantors. Canara Bank London Branch served as the original lender and agent for this USD 200 million facility. The encumbrances, as defined under Chapter V of the Takeover Regulations, were created due to the nature of conditions and arrangements within this facility agreement. It has been clarified that no direct pledge had been created by any of the Promoter Group Entities over the equity shares of Vedanta Limited in relation to this specific Facility Agreement.
Process and Timeline
The process for releasing these encumbrances commenced with the full repayment of the USD 200 million facility. Following this, the lender, Canara Bank London Branch, issued a no-objection certificate on July 3, 2025, confirming the satisfaction of all obligations under the facility agreement. This certificate paved the way for the formal release of all associated encumbrances. The disclosure to the stock exchanges, BSE Limited and National Stock Exchange of India Limited, was subsequently made on July 5, 2025, fulfilling the regulatory requirements.
Regulatory Compliance
This disclosure is mandated under Regulation 31 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, read with SEBI's Master Circular dated February 16, 2023. Regulation 31 requires promoters to disclose any creation, invocation, or release of encumbrances on their shares in the target company. The term "encumbrance" under Chapter V of the Takeover Regulations is broad, encompassing not just pledges but also other conditions or arrangements that restrict the free transferability of shares. Vedanta Resources Limited had previously disclosed the creation of these encumbrances on June 30, 2022, in connection with the aforementioned facility.
Shareholder and Market Impact
The release of encumbrance on a substantial portion of Vedanta Limited's shares held by its promoter group signifies the successful repayment of a significant financial obligation by Vedanta Resources Limited. While the disclosure notes that the "Post event holding of encumbered shares" remains the same as the "Promoter holding already encumbered" due to other existing facility agreements, the successful closure of this specific USD 200 million facility is a positive indicator of the promoter group's financial management and ability to meet its commitments. This reduction in specific financial liabilities tied to the shares can be viewed favorably by investors, as it potentially reduces a layer of financial risk associated with the promoter's holdings, even if the overall encumbered percentage remains constant due to other arrangements. It reflects a strengthening of the promoter's balance sheet and financial flexibility, which can indirectly bolster investor confidence in Vedanta Limited.
