Vedanta Power Limited has issued a postal ballot notice seeking shareholder approval for two new employee benefit schemes: the Employee Stock Option Plan 2026 (ESOP 2026) and the Employee Share Purchase Plan 2026 (ESPP 2026). The company proposes to implement these plans through an irrevocable employee welfare trust, utilizing secondary market acquisitions rather than issuing new shares.

The proposed ESOP 2026 involves a pool of not exceeding 16.62 crore employee stock options, representing 4.25% of the total paid-up share capital. Separately, the ESPP 2026 contemplates the transfer of up to 2.93 crore fully paid-up equity shares, representing 0.75% of the paid-up capital. Both plans are designed to align employee interests with long-term value creation without resulting in additional equity dilution for existing shareholders.

Plan Structure and Trust Mechanism

To comply with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the company will establish an irrevocable trust named 'VEDPOWER ESOS Trust'. This trust will acquire shares from the secondary market for the implementation of both plans. The company seeks approval to provide an interest-free loan to the trust, capped at 5% of the aggregate paid-up share capital and free reserves, to facilitate these acquisitions.

The ESOP 2026 is strictly performance-linked, with vesting contingent on achieving business and individual performance metrics over a three-year period. Business performance carries a minimum weightage of 50%, while individual performance accounts for the remainder. For leadership roles, strategic objectives may also influence vesting. The exercise price for options will be the face value of the share, i.e., ₹10 per share.

ESPP Eligibility and Matching Shares

The ESPP 2026 targets employees in grades M5 and below, excluding senior management. Participation is voluntary, funded through payroll deductions up to 10% of monthly salary, with an annual cap of ₹7.5 lakh per employee. Employees must hold acquired shares for a minimum of 24 months to be eligible for "Matching Shares" from the trust. The number of matching shares shall not exceed 50% of the shares held by the employee.

Related Party Transactions Approval

In addition to the employee benefit schemes, the notice seeks approval for material related party transactions (RPTs) with Vedanta Aluminium Metal Limited and Vedanta Limited. These transactions are essential for operational continuity following the recent demerger of the merchant power undertaking from Vedanta Limited.

The transactions with Vedanta Limited represent approximately 88% of the company's annual consolidated turnover for the immediately preceding financial year, while those with Vedanta Aluminium Metal Limited account for roughly 17%. These values exceed the materiality thresholds prescribed under Regulation 23 of the Listing Regulations, necessitating shareholder approval.

Voting Timeline and Procedure

The remote e-voting period commences on September 24, 2026, at 9:00 am and concludes on October 23, 2026, at 5:00 pm. Shareholders as of the cut-off date, September 18, 2026, are eligible to vote. The scrutinizer appointed for the process is Mr. Shivaram Bhat, Practicing Company Secretary.

What the Numbers Show

The structural choice to implement these plans via secondary acquisition through a trust highlights a deliberate strategy to preserve existing shareholder value. By sourcing shares from the open market rather than issuing new equity, Vedanta Power avoids immediate dilution of earnings per share. However, this approach requires significant liquidity support from the company, evidenced by the authorization to lend up to 5% of its paid-up capital and free reserves to the trust. This creates an internal financial obligation that must be managed alongside the operational dependencies revealed in the related party transaction approvals, where nearly 90% of proposed RPTs with Vedanta Limited relate to core operational flows like power purchase and expense recovery.

Vedanta Power Limited disclosed the creation of an encumbrance over equity shares held by its promoter group entities on September 18, 2026. The filing relates to a US$400 million bond issuance by Vedanta Resources Limited’s subsidiary, Vedanta Resources Finance II PLC.

The disclosure, made under Regulation 29(1) read with Regulation 29(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, was filed by GLAS Agency (Hong Kong) Limited acting as trustee and security agent for the bondholders.

Bond Issuance Details

Vedanta Resources Finance II PLC issued three series of Guaranteed Senior Bonds on September 16, 2026, termed as "Tap Bonds" because they consolidate with previously issued "Original Bonds":

The bonds are listed on the Singapore Exchange Securities Trust (SGX-ST) and carry credit ratings of Ba3 from Moody’s Inc., BB from Fitch Ratings Limited, and BB- from S&P Global Ratings.

Nature of Encumbrance

GLAS Agency (Hong Kong) Limited acts as the trustee and security agent for the bondholders. The encumbrance arises from covenants in the trust deeds rather than a direct pledge of shares. Key conditions include:

• Promoter Group Entities cannot create additional security interests over their assets unless specific conditions are met.
• Twin Star, Welter, and VHM II must acquire or dispose of shares in listed Indian subsidiaries only as specified.
• Vedanta Resources Limited and its subsidiaries must retain control over Vedanta Power or own at least 50.1% of its issued equity share capital.
• Asset disposal by Promoter Group Entities is restricted following an Event of Default.

Vedanta Resources Limited clarified that no pledge has been created over the equity shares of the listed Indian subsidiaries specifically for these Tap Bonds as of the disclosure date. The encumbrance reflects existing restrictions that fall under the definition of "encumbrance" in Chapter V of SEBI’s Takeover Regulations.

Shareholding Impact

The total promoter holding in Vedanta Power stands at 2,20,48,31,449 shares. Of this, 2,20,47,24,753 shares (99.99% of promoter holding) are already encumbered due to previous facility agreements. The current disclosure updates the regulatory record to include the covenants associated with the new Tap Bonds.

Proceeds from the Tap Bonds are intended to repay outstanding bonds, including accrued interest, and to cover transaction costs.