Vedanta Hit by Report From US Short- Seller Viceroy Research: Know details

Vedanta Hit by Report From US Short Seller Viceroy Research , called Vedanta a ‘Financial Zombie ‘. Share price of the Vedanta dropped by these allegations against the group.

What is the context of Vedanta Hit by Report From US Short- Seller?

2.5 years after Hindenburg Research brought down billionaire Gautam Adani, Another American short seller has set it’s sights on India’s corporate .

This time, it’s Viceroy Research targeting mining magnate Anil Agarwal’s Vedanta Group with allegations that sent shares dropping same like Adani.

What is Short selling?

Short selling is a trading strategy where an investor sells borrowed securities with the expectation that their price will decrease, allowing them to repurchase them later at a lower price and pocket the difference as profit. It’s essentially betting against a stock or asset’s price increase.

About Vedanta Group 

Vedanta Limited is an Indian multinational mining company headquartered in Mumbai, with its main operations in iron ore, gold and aluminium mines in Goa, Karnataka, Rajasthan and Odisha.

Vedanta is a leading global natural resources and technology conglomerate operating across India, South Africa, Liberia and Namibia.

It’s uniquely diversified company across the natural resources spectrum with interests in Oil & Gas, Zinc-Lead-Silver, Aluminium, Iron Ore, Steel, Copper, Ferro Alloys, Power, Nickel, Semiconductor and Glass.

Who is Viceroy Research, who Hit Vedanta with Report  ?

• Viceroy Research, a US based forensic financial research firm and activist Short- Seller, released a detailed 87 Page report titled “Limited Resources” on July 9, 2025.
• Viceroy is known for exposing corporate governance issues and fraudulent business models .
• Viceroy exposed Wirecard, Adler , Capitec before.
• It has taken a short position in the debt of Vedanta Resources Ltd (VRL), which means it will profit if the value of Vedanta’s bonds fall, which happened eventually.

What are the companies mentioned in the Viceroy report on Vedanta ?

1. Vedanta Resources Ltd (VRL) 

• UK registered parent holding company of the broader Vedanta Group .
• Privately Owned by Anil Agarwal through Volcano investments.
• Has heavy debt obligations ($ 6-8 billion)

2. Vedanta Ltd (India)

• It’s main revenue nod for the Vedanta group
• A publicly listed indian company involved in metals, mining, oil and gas , power and recently semiconductor sector.
• Vedanta Ltd has many Rich assets like Hindustan Zinc Ltd, BALCO, etc.

What are the US Short Seller Viceroy Research’s Allegations against Vedanta Group?

Viceroy’s report alleges a fraudulent and unsustainable group structure based on financial engineering and manipulation.

Key allegations are:

1. Vedanta runs a Ponzi like financing 

• VRL has no substantial revenue of its own, and depends on extracting cash from Vedanta Ltd and its other subsidiaries via dividend, inter company loans .
• Funds are siphon upward to service debt at the parent holding.
• This is a Ponzi like behaviour, where old debt is paid using new money from subsidiaries rather than real profits, this is also called evergreening of the debt. 

2. Vedanta alleged with Accounting manipulations

• Alleged overstatement of asset values to support loan coverage or attract sw financing
• Capex and investment commitments in semiconductor are also inflated or manipulated
• Off balance sheet liabilities and inter group loans hide real debt level so lack transparency.

3. Circular cash movements

• Vedanta engages in layered transactions to give a impression of solvency says Viceroy Research.
• Allegedly uses round tripping, in which funds move in a circle among group entities, creating fake liquidity.

4. Governance structures failure 

• Independent directors and auditors allegedly fail to prevent conflicts of interest and cash flows.
• Family control of the group may result in Opaque decision making, with minority investors and bondholders bearing the risk to fail.

5. Group can collepse according to Viceroy Research.

• Viceroy in its report warns of an imminent default or financial collepse if cash flow from Vedanta Ltd is blocked or debt re – financing fails.
• Viceroy compares Vedanta Group with Adani group’s debt risk, but without the same asset quality or geopolitical alignment.

Market reactions after Vedanta Hit by Report From US Short- Seller

• Stock impact (July 9, 2025)
• Vedanta Ltd fell by 8% , closed 3 – 4 % down.
• Hindustan Zinc Ltd fell by approx 5 %
• Vedanta’s USD bonds also declined, reflecting credit risk fears.

Vedanta’s Response to Us short seller Viceroy Research

The Vedanta group issued strong rebuttal, calling the Viceroy Research’s report ” A malicious combination of selective misinformation and baseless allegations, aimed at misleading investors.”

Highlights of Vedanta’s reply 

1. All information is Public, the report regurgitates publically available filling and distort them for own profit.
2. Audited accounts and disclosures: Vedanta complies with all SEBI and international financial reporting norms.
3. No engagment attempt by Viceroy: the Viceroy Research did not reach out to Vedanta for clarifications.
4. Timing of the report: Report just came before key decision Vedanta’s demerger plan and debt restructuring
5. Demerger of the Vedanta group: Vedanta is in the process of restructuring by splitting into 6 seperate listed entities like,

1. Vedanta Aluminium

2. Vedanta Oil &Gas

3. Vedanta Power

4.Vedanta Steel & Ferrous

5.Vedanta Base Metals

6. Vedanta Ltd ( residual)

Viceroy’s report Claims that the demerger may dilute liabilities, allowing VRL to extract more value from each unit seperately.

Strategic implications in the case of Vedanta Hit by Report From US Short- Seller

For Vedanta Group 

• Could face increased regulatory scrutiny from SEBI, RBI and bondholders
• May find it difficult to raise fresh debt or equity capital
• Demerger and restructuring might be delayed or may be modified

For Indian market 

• Reignites debate on corporate governance in family controlled business houses.

My views on Vedanta Hit by Report…

1. This can be deliberate attempt from America to curb India’s stretegic rise on global stage.
2. Current Trade deal talks with America can be reason to arm twist india.
3. PM Modis latest visit to mineral Rich countries like Ghana , Argentina, Namibia and deals with these countries in sector of critical minerals, also Vedanta is involved in mining activities so to curb Vedanta this report maybe circulated.
4. Vedanta Hit by Report due to its Demerger also be a reason , to curb Vedanta from rising extra capital.
5. There can be also real mis governance heppning inside Vedanta but report of Viceroy deals with its own story and not any concrete facts as such.

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