The shares of a global natural resources company fell nearly 8% after short-seller Viceroy Research accused its debt-laden parent of draining funds from the listed entity to service its own obligations.
With a market capitalization of Rs 1,72,077 Crores, the share price of Vedanta Ltd was trading over 8% down to hit an intraday low of Rs 421.00 per share from its previous closing price of Rs 456.20 per share.
What’s the News
Short-seller Viceroy Research has raised serious concerns about the financial health of the Vedanta Group in a report dated July 9. The firm stated it is short on the debt of Vedanta Resources Ltd (VRL), the parent company of NSE-listed Vedanta Ltd (VEDL), describing VRL as a “financial zombie” dependent on continuous cash transfers from its listed subsidiary.
The report alleges that VRL, which has no significant operations of its own, is systematically draining VEDL by forcing it to take on increasing debt and exhaust its cash reserves.
This, according to Viceroy, is eroding the fundamentals of VEDL, the very assets that serve as collateral for VRL’s creditors. It likens the situation to a Ponzi scheme, warning that the entire group is teetering on the edge of insolvency.
Among the most serious accusations are inflated asset values, interest expenses that far exceed reported note rates, aggressive capitalisation of expenses to inflate profits, and billions in undisclosed off-balance-sheet liabilities.
The report also criticises corporate governance practices, including auditor appointments and transparency, and claims some of the group’s actions are tantamount to fraud.
Viceroy also questioned Vedanta’s proposed demerger plan, arguing it does nothing to resolve the group’s core cash crunch and would instead burden each demerged entity with unsustainable debt from day one. Vedanta has yet to issue a response to the allegations.
Vedanta Statement
Vedanta countered Viceroy Research’s claims, calling the July 9 report “a malicious combination of selective misinformation and baseless allegations” designed to create false market panic. The company said the report merely rehashes publicly available data, “sensationalising the context” for profit, and noted Viceroy’s own disclaimer that its views are just opinions, not facts.
Vedanta suggested the timing was aimed at undermining upcoming corporate initiatives, insisted its stakeholders can see through such tactics, and reiterated that it remains focused on business growth while urging investors to ignore “speculation and unsubstantiated allegations.
About the Company
Vedanta Limited is a leading Indian company involved in natural resources and technology. It works across a wide range of sectors, including oil & gas, zinc, silver, copper, aluminium, iron ore, steel, power, semiconductors, and glass manufacturing.
With operations in India and countries like South Africa, Namibia, UAE, and South Korea, Vedanta has a strong global presence. The company has committed $5 billion to become carbon neutral by 2050.
Looking ahead to FY26, Vedanta is focused on growth and improving efficiency. Key projects like the Lanjigarh Expansion and Sijimali Bauxite Mine are expected to lower costs and boost production.
With several expansion plans nearing completion, Vedanta is confident about delivering strong performance while staying responsive to market changes and focused on creating long-term value
The company reported a revenue of Rs 152,968 crore in FY25, up by 6.4 percent from its FY24 revenue of Rs 143,727 crore. Coming to its profitability, the company reported a net profit rise of 172.4% to Rs 20,535 crore in FY25 from Rs 7,539 crore in FY24. It maintains a healthy financial profile with a ROCE of 25.3% and ROE of 38.5%, reflecting efficient capital and equity utilization.
Written By Rohan Pandey
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