🔍 Vedanta Under Fire: Viceroy Research Labels Group Structure as ‘Financially Unsustainable’
In a scathing report released on July 9, 2025, short seller Viceroy Research has raised serious concerns over Vedanta Group’s financial model, stating that its complex cross-holding structure and debt-financing mechanisms resemble a Ponzi scheme.
📉 What the Report Alleges
The report, titled “Smoke & Mirrors: The Vedanta Group Unveiled,” makes the following key claims:
Debt-funded dividends to prop up listed entities
Opaque inter-company loans across subsidiaries
Reliance on constant refinancing to sustain operations
Risk of default if liquidity dries up
"Vedanta is not generating enough organic cash to cover its debt and is using newer debt to service older obligations — a classic Ponzi-like setup," said Viceroy Research.
🛑 Vedanta Responds
Vedanta Ltd issued a formal response terming the report “malicious, misleading, and factually incorrect.” The company added:
Its group debt has reduced by ₹11,000 crore over FY24
Planned demerger will enhance transparency
Independent auditors have validated intra-group transactions
Shares of Vedanta fell by 7.8% intraday following the report but recovered partially after the company’s rebuttal.
💼 Vizzve Financial View: Time for Caution?
Vizzve Financial, in its special coverage titled "Vedanta vs Viceroy: Crisis or Correction?", analyzed the situation with a balanced lens.
🧾 Vizzve Highlights:
Group debt stands at ₹2.1 lakh crore, much of it due to Vedanta Resources (UK)
Interest coverage ratio has declined to 1.4x, triggering credit watch
Vizzve has placed Vedanta on “High Risk Watchlist” but maintains exposure to non-debt servicing verticals like Hindustan Zinc
❓ FAQ: Vedanta vs Viceroy — What You Must Know
Q1: Who is Viceroy Research?
A US-based short-selling firm known for investigative financial reports that often lead to market volatility.
Q2: Is Vedanta accused of actual fraud?
No criminal charges have been filed, but the report raises serious governance concerns.
Q3: Will SEBI investigate the claims?
SEBI is reportedly reviewing the matter for possible misreporting or investor risk disclosures.
Q4: How does this affect retail investors?
Increased volatility in Vedanta stock is likely. Investors should await clarity post-earnings and demerger steps.
Q5: Does Vizzve Financial have exposure to Vedanta?
Yes. Vizzve holds structured equity in Vedanta Aluminium but has limited direct exposure to the parent entity.
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Published on July 9, 2025 • By Benny
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