Hindustan Zinc releases 2.12bn pledged shares after loan prepayment

What Hindustan Zinc announced

Hindustan Zinc Ltd (HZL) disclosed that the encumbrances on a large block of its equity shares have been fully released. The release was effected by Victory XII Pte Ltd, which acted as the agent for the finance parties under a term‑loan facility. The filing, submitted to BSE and NSE on 22 June 2026, states that the pre‑payment of the loan on 17 June 2026 triggered the release of the pledged shares.

"All the encumbrances created pursuant to the facility agreement dated 16 July 2024 have now been fully released with effect from the date of pre‑payment."

Details of the encumbrance release

• Acquirer / Agent: Victory XII Pte Ltd, acting as the agent for the finance parties under the Facility Agreement dated 16 July 2024 (amended and restated thereafter).
• Nature of encumbrance: The shares were pledged/encumbered as security for the term‑loan facility. No voting shares, warrants, convertible securities or other instruments were held by the acquirer.
• Number of shares released: 2,116,884,819 shares, which corresponds to 50.10% of Hindustan Zinc’s total share/voting capital (both on a basic and diluted basis).
• Date of release: 17 June 2026, the same day the loan was prepaid.
• Share capital figures: Hindustan Zinc’s equity share capital before and after the release remains unchanged at 422,53,19,000 shares of Rs 2 each, aggregating Rs 8,45,06,38,000.
• Post‑release holding: After the release, Victory XII Pte Ltd holds nil voting shares, nil warrants, and nil encumbered shares.

The filing also references the earlier disclosure dated 18 July 2024, where Victory XII Pte Ltd was identified as the agent for the finance parties. The current disclosure satisfies the requirements of Regulation 29(2) and 29(4) of the SEBI Takeover Regulations, as well as the SEBI Master Circular dated 16 February 2023.

Regulatory framework

The Substantial Acquisition of Shares & Takeovers (SAST) Regulations, 2011, require any party that acquires, disposes of, or releases an encumbrance on shares exceeding certain thresholds to notify the stock exchanges. Regulation 29(2) mandates a filing when an encumbrance is released, while Regulation 29(4) requires the filing to be accompanied by a statement that the release falls within the definition of “encumbrance” under Chapter V of the Takeover Regulations.

Victory XII Pte Ltd’s disclosure therefore complies with:

• Regulation 29(2) – notifying the exchanges of the release of encumbrance.
• Regulation 29(4) – confirming that the released interest meets the statutory definition of an encumbrance.
• SEBI Master Circular (16 Feb 2023) – providing the procedural backdrop for such disclosures.

Key facts at a glance

Why this matters for investors

The removal of an encumbrance that covered half of Hindustan Zinc’s share capital has a few concrete implications:

• Takeover calculations: Encumbered shares are counted in the “total share capital” for the purpose of determining whether a party has crossed the 25% trigger under the Takeover Regulations. Their release therefore reduces the pool of shares that could be considered pledged in a future acquisition scenario.
• Voting power: Since the encumbered shares were not held as voting shares by the acquirer, the release does not alter the voting dynamics of existing shareholders. However, the shares become free of lien, potentially making them more attractive for open‑market transactions.
• Financial covenant relief: The pre‑payment of the term‑loan and consequent release of security may improve Hindustan Zinc’s balance‑sheet flexibility, though the filing does not disclose any change in debt levels.
• Regulatory compliance: The filing demonstrates that both Hindustan Zinc and the finance parties are adhering to SEBI’s disclosure obligations, reducing the risk of regulatory penalties.

No new equity issuance, share buy‑back, or change in promoter holdings is reported in this filing.

Conclusion

Hindustan Zinc Ltd confirmed that on 17 June 2026 the encumbrances on 2.12 billion of its shares—representing just over half of its capital—were fully released following the pre‑payment of a term‑loan facility. Victory XII Pte Ltd, the agent for the finance parties, now holds no voting or encumbered shares in the company. The disclosure satisfies SEBI’s Regulation 29 requirements, and while it clears a significant lien on the stock, no further corporate actions are pending as per the filing.