Mac Charles India Limited has created a significant encumbrance on its equity shares as part of a major debenture issuance structure. The company disclosed this substantial acquisition under Regulation 29 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, on December 11, 2025.

Encumbrance Details

The encumbrance has been created in favor of Catalyst Trusteeship Limited, acting as debenture trustee for the benefit of holders of non-convertible debentures issued by MacCharles Hub Projects Private Limited. The transaction involves substantial financial commitments and regulatory compliance requirements.

Debenture Structure

The encumbrance secures 54,000 senior, secured, redeemable, listed, rated, non-convertible debentures with a nominal value of ₹1,00,000 each. These debentures aggregate to a total value of ₹5,400.00 crores and have been issued by MacCharles Hub Projects Private Limited. The debentures represent a significant financing arrangement backed by the equity holdings in Mac Charles India Limited.

Promoter Holdings and Control Covenants

The encumbered shares are held by Embassy Property Development Limited, identified as the pledgor in the disclosure. The debenture trust deed dated December 8, 2025, contains specific control covenants that directly impact the promoter holdings. Under these covenants, the debt becomes immediately repayable if Embassy Property Development Limited and Mr. Jitendra Virwani cease to own at least 51% of the issued and paid-up share capital of Mac Charles India Limited on a fully diluted basis, or if they cease to directly or indirectly control the company.

Regulatory Compliance

The disclosure has been made pursuant to Regulation 29(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Catalyst Trusteeship Limited, represented by Senior Vice President Deesha Srikkanth, filed the necessary documentation with BSE Limited. The covenant structure is classified as an encumbrance under the Takeover Regulations, requiring mandatory disclosure to ensure transparency in substantial shareholding changes.

Financial Impact

The encumbrance represents 51% of Mac Charles India Limited's total share capital, with each share having a face value of ₹10.00. This substantial encumbrance creates a direct linkage between the company's ownership structure and the debenture obligations of its related entity, MacCharles Hub Projects Private Limited. The arrangement ensures that debenture holders have security through the promoter's controlling stake in the listed entity.

Mac Charles Limited, a prominent real estate and hospitality company, has reported a significant reduction in its standalone loss for the quarter ended September 30, 2025 (Q2 FY26). The company's financial performance shows signs of improvement amid ongoing real estate projects and strategic initiatives.

Financial Highlights

Mac Charles posted a standalone loss of ₹15.54 crore for Q2 FY26, a substantial improvement from the ₹134.76 crore loss reported in the same period last year. This narrowing of losses indicates the company's efforts towards financial recovery and operational efficiency.

The company's revenue from operations saw a remarkable increase to ₹237.47 crore in Q2 FY26, compared to ₹33.04 crore in Q2 FY25. This significant growth in revenue suggests a strong uptick in the company's core business activities.

Debt Management and Security Cover

Mac Charles continues to maintain a robust security cover for its outstanding non-convertible debentures (NCDs). As of September 30, 2025, the company reported:

The strong security cover ratio of 7.90 times, well above the required 1.00 times, demonstrates the company's commitment to maintaining a healthy financial position and protecting the interests of its debenture holders.

Operational Updates

During Q2 FY26, Mac Charles made significant progress in its real estate operations:

1. The company received an Occupancy Certificate for its building, Embassy Zenith, marking the completion of the office building project.
2. Lease agreements were executed for floors 5th to 13th of Embassy Zenith on April 3, 2025, with these floors already handed over to the lessee.
3. Additional lease agreements for floors ground to 4th of Embassy Zenith were signed on September 25, 2025, with subsequent handover to the lessee.

These developments indicate Mac Charles's active engagement in expanding its commercial real estate portfolio and generating recurring rental income.

Corporate Actions

The Board of Directors has previously approved a Scheme of Arrangement for the demerger of a certain undertaking from Mac Charles Limited to Embassy Prism Ventures Limited, a wholly-owned subsidiary. While the company has received no objection from the BSE and filed the scheme with the National Company Law Tribunal, the final approval is still pending.

Conclusion

Mac Charles Limited's Q2 FY26 results reflect a company in transition, with narrowing losses and growing operational revenues. The strong security cover for its NCDs and progress in real estate projects position the company for potential growth. However, investors should continue to monitor the company's performance and the outcome of its corporate restructuring efforts in the coming quarters.

Note: All financial figures are based on standalone results unless otherwise specified.