Market Performance
- The Vedanta share price plunged nearly 8% in intraday trading on Wednesday, July 9, reaching a low of ₹420.65 on the NSE.
- With this drop, the stock has recorded a 6.67% decline in 2025 so far.
- Shares of Hindustan Zinc Limited (HZL), a subsidiary of Vedanta, also saw a steep fall of 5%, hitting a day’s low of ₹415.15.
- HZL shares have declined 37% over the past year and 19% in the last month alone.
Main News
The sharp decline in Vedanta share price came immediately after a report from Viceroy Research, which flagged significant financial red flags within the group.
Key Allegations by Viceroy Research:
- Described Vedanta Resources Ltd (VRL), Vedanta’s parent company, as a “financial zombie” and a “parasite” draining its subsidiary’s resources.
- Accused VRL of pressuring Vedanta to:
- Take on more debt
- Exhaust its cash reserves.
- Stated the actions have pushed the group towards insolvency, masked by:
- Continuous cycles of new debt
- Accounting manipulations
- Delayed recognition of massive undisclosed liabilities
- Claimed that the group’s operating subsidiaries show:
- Inflated asset values
- Cross-collateralised debt
- Systematic capitalisation of expenses, misleading the profitability picture.
The report concluded that these financial maneuvers may amount to fraud and labeled the structure a risk to creditors.
Company Details
In a prompt response, Vedanta Limited issued a strong rebuttal to the claims made in the Viceroy report.
Company’s Official Response:
- Called the report a “malicious mix of misinformation and baseless allegations.”
- Accused the authors of:
- Failing to contact the company
- Spreading false propaganda
- Pointed out that the report:
- Merely compiles public domain data.
- Uses sensationalism to manipulate market sentiment
- Highlighted that Viceroy included disclaimers suggesting the report was meant only for educational purposes and expressed opinions, not facts.
- Urged the public to avoid speculation and unsubstantiated claims and reiterated the company’s focus on business and growth.
Summary of the Article
- On July 9, Vedanta’s share price plummeted 8%, reacting sharply to a report by Viceroy Research.
- The report alleged unsustainable financial practices and governance lapses within the Vedanta Group.
- It accused Vedanta Resources Ltd of draining Vedanta’s resources to service its debts.
- Vedanta dismissed the claims, labeling them baseless and malicious, and questioned the intent and timing of the report.
- The incident also impacted Hindustan Zinc, which fell 5% on the same day.
