Market Turmoil Hits Vedanta After Critical Report

In a dramatic turn of events reminiscent of the Hindenburg-Adani saga, US-based Viceroy Research has launched a scathing attack on Vedanta Resources, labeling its financial structure as unsustainable and operationally compromised. The report, released just before Vedanta's annual shareholder meeting, sent shockwaves through the market, causing a significant dip in share prices.

Vedanta's swift rebuttal to the 87-page dossier dismissed it as a collection of baseless allegations, yet the damage was evident as stocks tumbled before a partial recovery. Subsidiary Hindustan Zinc mirrored this volatility, underscoring the market's nervousness.

Behind the Allegations: A Financial House of Cards?

Viceroy's critique centers on Vedanta Resources' reliance on its Indian counterpart, Vedanta, accusing it of draining cash reserves and increasing leverage to unsustainable levels. The firm's bold comparison to a Ponzi scheme has raised eyebrows, with Vedanta countering that the timing aims to undermine its ongoing corporate restructuring efforts.

Regulatory Hurdles and Future Prospects

Amidst these allegations, Vedanta's ambitious demerger plan faces regulatory challenges, particularly from the petroleum and natural gas ministry. With Anil Agarwal's significant stake and recent debt repayments, the company's next moves are under intense scrutiny.