Viceroy Research Elevates Alarm Over Vedanta Resources’ Financial Stability: The US-based short seller disclosed on Wednesday a strategic short position on the debt stack of Vedanta Resources, the holding company controlling Vedanta Limited, claiming its financial architecture is at high risk of collapse and threatens creditors’ recovery.
According to Viceroy’s investigative report, Vedanta Resources Ltd. functions purely as a holding entity, lacking independent revenue streams and persistently draining cash from Vedanta Ltd. to service its liabilities—a practice allegedly exacerbating operational strain on the subsidiary.
The research firm asserts that Vedanta’s forced capital extraction has led to escalating leverage ratios and depletion of critical reserves, severely undermining the value of its core offshore collateral and creating “the hallmark of a financial ponzi structure.”
Vedanta Limited shares plunged 6.20% to ₹428 on the NSE by midday trading (as of 12:08 PM IST), underperforming dramatically against the sideways Nifty 50 index, following the report’s release.
“Extensive Asset Fire-Sale Potential Imminent”: Viceroy’s analysis warns that Vedanta Resources’ continued prioritization of short-term debt servicing over sustainable financing may soon trigger distress liquidation of key assets, including its Ferronickel unit and offshore stakes.
Additional key findings include:
• Undisclosed liabilities exceeding $3 billion discovered through regulatory filings
• Aggressive use of accounting technicalities to maintain superficial solvency
• Demerger proposal criticized as “debt-burden transfer mechanism”
As of publication, Prime News Network’s attempts to contact Vedanta’s investor relations team for rebuttal received no response.
