Shares of Vedanta, the Anil Agarwal-led mining conglomerate, came under sharp pressure today, plunging nearly 8% intraday before trimming some losses. The shares of the company dropped 8.85% from their intraday high of Rs 461.50 to a low of Rs 420.65. The 52-week high of the company stands at Rs 526.95 and the low is at Rs 363. As of the latest, the company has a market capitalisation of Rs 1.62 lakh crore.
The fallout extended to its subsidiary Hindustan Zinc, which also slipped nearly 5%. The steep correction followed a scathing report by short-seller Viceroy Research, which alleged Vedanta’s parent company of severe financial irregularities.
Let’s take a look at the major triggers behind the stock rout –
1. Short-seller labels Vedanta a “Ponzi-like” structure
One of the significant blows came from Viceroy Research’s report, in which the firm compared Vedanta Resources (VRL), Vedanta’s parent to a “Ponzi scheme.” In its exact words, Viceroy wrote, “Vedanta Resources cannot meet its short-term financial obligations without looting Vedanta. This strategy resembles a Ponzi scheme.”
The report alleged that the parent company has no substantial operations and relies entirely on cash from its listed Indian subsidiary, creating a “self-destructive feedback loop.”
2. Accusations of inflated profits and capitalised expenses
The report further alleged that Vedanta Group subsidiaries systematically capitalise expenses, thereby overstating profits and inflating asset values.
3. Debt burden and unsustainable structure
The report pointed out how Vedanta Resources is under a debt burden and is dependent on Vedanta to stay afloat. The report noted Vedanta resources as a “financial zombie” and “parasite” being kept alive by transfusions of cash.
“Vedanta Resources Ltd is a parasite holding company with no significant operations of its own,” it added.
Ongoing demerger and regulatory uncertainty
Vedanta is in the middle of a complex demerger plan that will split the company into five separate listed entities. While the demerger has received a no-objection certificate from the NSE, a final green light from the National Company Law Tribunal (NCLT) is pending. During a recent hearing, the Petroleum Ministry asked for more time to review the proposal.
Vedanta responds to Viceroy Report allegations
In response to the report published by Viceroy Research on July 9, titled “Limited Resources”, Vedanta issued a statement, calling the document misleading and sensationalised. In an exchange filing, the company wrote, “The Viceroy Research Group report on Vedanta – Limited Resources, published on July 9, 2025, is a malicious combination of selective misinformation and baseless allegations to discredit the Group. It has been issued without making any attempt to contact us, with the sole objective of creating false propaganda. It only contains a compilation of various information already in the public domain, but the authors have tried to sensationalise the context to profiteer from market reaction.”
As per the regulatory filing, company further added, “The timing of the report is suspect and could be aimed at undermining forthcoming corporate initiatives. Our stakeholders are discerning enough to understand such tactics. In fact, to avoid any responsibility, the authors of the report have added various disclaimers stating that the report is for educational purposes only and expresses their opinions and not statements of fact (page 7). We remain focused on the business and growth, and request everyone to avoid speculation and unsubstantiated allegations.”