New Delhi | July 10, 2025 — India’s metals and mining giant Vedanta Ltd is facing serious heat after a scathing report by US-based short-seller Viceroy Research accused its parent company, Vedanta Resources Ltd (VRL), of running a “Ponzi-like” financial operation that siphons off profits and burdens the Indian arm with debt.
The 87-page report, published on July 9, sent shockwaves through Dalal Street. Vedanta Ltd’s shares tumbled as much as 8.7% intraday, eventually closing around 3.5% lower, with investors scrambling to make sense of the high-voltage allegations.
What Viceroy Is Alleging
The report claims that VRL, the UK-based parent founded by Anil Agarwal, is essentially a “parasite” feeding off the profits of its Indian subsidiary. According to Viceroy, Vedanta Ltd is being drained through:
- Excessive dividend payouts
- Questionable inter-company loans
- Hefty brand fees (like from Hindustan Zinc)
It even accuses the group of cooking numbers at ESL Steel, alleging inflated capex claims and manipulated financials.
Viceroy, known for its aggressive short-seller campaigns, announced it has taken a short position against Vedanta Resources’ debt. Simply put, they’re betting big that the group will fail to repay what it owes.
“This is a house of cards built on aggressive financial engineering and intercompany siphoning,” Viceroy’s report stated.
Vedanta Hits Back: “Baseless, Malicious”
Vedanta Ltd didn’t hold back either. In a strongly worded rebuttal, the company dismissed the report as “baseless and malicious”, calling it a deliberate attempt to mislead investors. They also said Viceroy never reached out for clarification before going public.
“All the financial details Viceroy used are already in the public domain. The report is nothing but a selective misrepresentation of facts,” Vedanta’s spokesperson said.
The company also questioned the timing—just as it is restructuring and working to slash $3 billion in net debt over three years through a major demerger.
What the Experts Are Saying
While the market reacted sharply, not everyone’s buying the doomsday narrative.
Top brokerage JP Morgan stood by Vedanta, reiterating its “Overweight” rating. Analysts said the group’s cash flow, leverage, and business fundamentals remain strong and that the report doesn’t offer many new facts.
“Investors should not be distracted. Vedanta’s fundamentals remain intact,” JP Morgan noted.
Others, however, say the detailed allegations—especially around intercompany transactions and ESL Steel—could draw regulatory attention, especially from SEBI. Viceroy has already hinted it may submit its findings to Indian authorities.
What This Means for You
If you’re a retail investor or just someone watching India Inc, this story is far from over. Key things to watch:
- Will SEBI or other regulators take up an investigation?
- How does Vedanta manage its planned demerger and debt reduction goals in the coming quarters?
- Will bondholders and foreign lenders start asking tough questions?
Quick Recap:
| What Happened | Viceroy accused Vedanta’s parent of being a Ponzi-like drain on its Indian arm |
|---|---|
| Market Reaction | Vedanta shares plunged up to 8.7% before closing lower by ~3.5% |
| Vedanta’s Response | Called the report malicious, misleading, and poorly timed |
| Expert Take | Some caution, others say fundamentals are still strong |
Keep following Bharat Global Time for unbiased updates on this evolving corporate showdown.
