MUMBAI– Shares of Vedanta Ltd. fell sharply on Wednesday, plunging over 7% in intraday trading, following a damning report by U.S.-based short-seller Viceroy Research that alleged the conglomerate operates like a “Ponzi” scheme—a claim the Anil Agarwal-led company has strongly rejected.
In its report, Viceroy Research claimed, “The entire group structure is financially unsustainable, operationally compromised, and poses a severe, under-appreciated risk to creditors.”
According to the short-seller, Vedanta Resources Ltd.—the parent holding company—relies on funds from Vedanta Ltd. to service its debt, as it lacks substantial independent operations. This, the report argued, has led Vedanta Ltd. to increase its own debt burden and draw down its reserves, thereby weakening the group’s overall financial health.
The report further alleged that Vedanta Resources has deferred significant undisclosed liabilities and is dependent on new borrowing and accounting maneuvers to remain solvent. Viceroy warned that a group-wide insolvency event is “no longer a remote possibility.”
As of March, promoter holding in Vedanta stood at 56.38%, according to data from the Bombay Stock Exchange (BSE).
The report was published just ahead of Vedanta’s Annual General Meeting (AGM), scheduled for Thursday.
In a swift response, Vedanta Group dismissed the report as a “malicious combination of selective misinformation and baseless allegations,” claiming the short-seller made no attempt to contact the company before publishing.
“The report consists solely of publicly available information, misrepresented and taken out of context, clearly intended to create panic in the market and serve the vested interests of the report’s authors,” the company said in a statement. “The timing of this release is suspicious and seems aimed at undermining upcoming corporate initiatives. Our stakeholders are discerning enough to recognize such tactics.”
Despite opening higher at ₹461.00 on the NSE—up from the previous close of ₹456.30—Vedanta shares quickly plunged to an intraday low of ₹420.65 as selling intensified following the report’s release. As of 1:55 p.m., the stock was trading at ₹439.95, still down 3.58% for the day.
Hindustan Zinc, a Vedanta Group subsidiary, also came under pressure, falling over 3% in early trade. The stock opened at ₹437.30 but slipped to an intraday low of ₹415.15. As of 2:13 p.m., it was trading at ₹425.15, down ₹11.05 or 2.53%. (Source: IANS)
