Embassy developments has filed a disclosure regarding the encumbrance of promoter shares under SEBI Takeover Regulations dated March 18, 2026. The disclosure was submitted by the company's promoters, Embassy Property Developments Private Limited and JV Holding Private Limited, in compliance with Regulation 31(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Promoter Shareholding and Encumbrance Details

The company's total promoter shareholding stands at 5,93,129,123 equity shares, representing 42.65% of the total share capital. The encumbered shares constitute 49.99% of the promoter shareholding and 21.32% of the total share capital.

Share Pledge Arrangements

The encumbrance involves two separate pledge arrangements by the promoter entities. Embassy Property Developments Private Limited has pledged 5,33,40,000 equity shares representing 3.84% of total share capital. JV Holding Private Limited has pledged 2,43,200,930 equity shares representing 17.48% of total share capital.

EPDPL Encumbrance Details

JVHPL Encumbrance Details

Financial Security and Valuation

The pledged shares are valued at ₹267.66 crore based on a share price of ₹50.18 per share. The total amount involved in the encumbrance is ₹577.50 crore, creating a security cover ratio of 0.46.

Fund Utilization Purpose

The borrowed funds will be utilized by the promoters and promoter group entities for refinancing existing facilities, working capital requirements, and general corporate purposes. The disclosure specifies that the funds will not be used for any purpose prohibited by applicable laws.

The debentures involved in the arrangement include multiple series with various ISIN codes, including Series A through Series 3, all of which remain unlisted and unrated instruments.

Embassy Developments Limited has informed stock exchanges about a significant regulatory challenge facing its subsidiary, as the Karnataka Industrial Areas Development Board (KIADB) has ordered the resumption of approximately 78 acres of industrial land in Bengaluru. The order, dated March 16, 2026, and received on March 17, 2026, directs Embassy East Business Park Limited (EEBP) to surrender possession of the land within 30 days.

Land Holdings and Lease Details

The affected property is situated at Kadugodi Industrial Area, Bengaluru Urban District, where EEBP holds leasehold rights through a Lease Cum Sale Agreement (LCSA) executed with KIADB on June 7, 2007. The lease agreement remains valid until June 6, 2029.

KIADB's Allegations and Order

KIADB has passed the order under Section 34B of the Karnataka Industrial Areas Development Act, 1966, citing alleged breaches of the LCSA terms. The primary allegations center on EEBP's execution of memorandum of understanding, agreements, and agreement-to-sell arrangements with third-party sub-lessees and potential buyers for certain portions of the land without obtaining prior KIADB approval.

Company's Defense Strategy

EEBP has categorically denied the allegations and, based on legal counsel advice, believes the order can be successfully challenged on multiple grounds:

Key Defense Arguments

Sub-lease Compliance: EEBP maintains that sub-lease arrangements with third-party sub-lessees were undertaken after obtaining a no-objection letter from KIADB, ensuring compliance with LCSA terms.

Legal Distinction of Agreements: The company argues that agreement-to-sell arrangements do not create or transfer property interests by themselves. These agreements were executed without transferring possession or alienation and were expressly subject to LCSA compliance. The arrangements were structured as conditional conveyances contingent upon KIADB executing a sale deed in favor of EEBP.

Natural Justice Violations: EEBP had sent prior written communications to KIADB documenting KIADB's consent, legal distinctions between agreements-to-sell and concluded sales, and other relevant material facts. The order allegedly makes no reference to these communications and fails to address the arguments presented.

Legal Remedies and Next Steps

The company, along with EEBP, is evaluating the order's implications and intends to pursue appropriate legal remedies, including approaching the High Court of Karnataka for suitable relief. The disclosure emphasizes that the execution of transaction documents was solely for collaborative arrangements to accelerate project implementation within stipulated timelines.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with comprehensive details provided in the prescribed format under the SEBI Master Circular dated January 30, 2026. Company Secretary Vikas Khandelwal has certified the information as true, correct, and complete to the best of his knowledge and belief.