Vedanta shares tumbled 7% on July 9 after Viceroy released a damning report on parent company Vedanta Resources (VRL), calling the group structure “financially unsustainable” and “operationally compromised.” As of 12:14 PM, the shares were trading 4.30% lower at Rs 436.70.
Viceroy announced it is short on Vedanta Resources’ debt and accused VRL of draining Vedanta Ltd (VEDL)—its main operating arm—of cash to service its own rising liabilities. The report likens the group’s financial design to a “Ponzi scheme,” alleging that VRL survives only by extracting funds from VEDL while burdening it with growing debt and depleting reserves.
The short-seller claims VRL, which has minimal operations of its own, relies entirely on cash flows from VEDL to stay afloat. This cycle, according to Viceroy, is pushing both entities toward insolvency.
Allegations include inflated asset values, undisclosed off-balance-sheet expenses, questionable CAPEX accounting, and ongoing governance failures. The report also criticizes Vedanta’s proposed demerger plan, arguing it does not solve the core liquidity problem and could further burden spun-off units with unsustainable debt.
Viceroy concludes that Vedanta’s structure is no longer viable and risks a group-wide default. The market reacted sharply, reflecting growing investor unease over the company’s complex financial architecture and opaque debt practices.
Vedanta has not yet responded publicly to the report.
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