By Shares of Vedanta Ltd plunged as much as 8% intraday on July 9, before paring some losses, after US-based short seller Viceroy Research issued a scathing report on its parent Vedanta Resources.
The note called the group “financially unsustainable, operationally compromised, and resembling a Ponzi scheme.”
At the time of writing, Vedanta shares were trading 3.5% lower at ₹439.60 on the NSE, while Hindustan Zinc Ltd — another group company — was down 2.6% at ₹424.
Viceroy Research is known for its investigations into major corporate scandals, including Wirecard and Steinhoff.
Viceroy’s allegations on Vedanta
Viceroy’s central claim is that Vedanta Resources, the UK-based holding company controlled by Anil Agarwal, is “a parasite holding company with no significant operations of its own, propped up entirely by cash extracted from its dying host: Vedanta Ltd.”
“This creates a self-destructive feedback loop,” the report said, alleging that Vedanta Ltd’s equity — used as collateral for Vedanta Resources’ borrowings — is being compromised by the group’s financial practices.
Vedanta – Limited Resources
Viceroy is short of Vedanta Resources (PropCo), the heavily indebted parent & majority owner of Vedanta Limited (NSE : VEDL). The group structure is financially unsustainable, operationally compromised, & resembles a Ponzi scheme. $VEDL 1/
“Vedanta Resources cannot meet its short-term financial obligations without looting Vedanta Ltd. This strategy resembles a Ponzi scheme,” it added.
Viceroy also accused the group of capitalising expenses across subsidiaries to artificially inflate profits and asset values — a practice it termed “material misrepresentation.”
The report raised concerns about rising interest expenses despite debt reduction.
Viceroy claimed Vedanta Resources’ effective interest rate has jumped from 6.4% to 15.8% since FY21, while generating no operating free cash flow.
Vedanta responds
In response, Vedanta dismissed the report as a “malicious combination of selective misinformation and baseless allegations.”
The group said Viceroy did not attempt to contact it before publishing the note.
“Viceroy Research report is a malicious combination of selective misinformation and baseless allegations to discredit the Group,” Vedanta said in a statement.
As of March 31, 2025, Vedanta Resources’ standalone net debt stood at $4.9 billion.
The company has previously announced a plan to reduce its debt by $3 billion over three years, starting June 2024.
The company added in the press release:
It only contains compilation of various information – which is already in the public domain, but the authors have tried to sensationalise the context to profiteer from market reaction.
The timing of the report is significant, coming amid Vedanta’s proposed restructuring into multiple listed entities — a move announced in 2023 following the failure of Agarwal’s 2020 attempt to privatize Vedanta Ltd.
The short seller further alleged that Hindustan Zinc Ltd (HZL) is “a legal and financial minefield” involving contract breaches, regulatory violations, and related-party deals meant to extract value at the cost of public shareholders.
“Any one of the multitude of risks we outline is sufficient to topple Vedanta’s already fragile, Ponzi-like structure,” Viceroy said, adding that the group showed “systematic governance failures” including questionable auditor appointments.
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