Vedanta, Hindustan Zinc Shares Plunge Amid US Short-Seller's Financial Discrepancies Claims

In an otherwise muted trading session, Vedanta Group stocks have become the focal point of investor attention. This sudden shift comes after Viceroy Research, a US-based short seller, published a report raising serious concerns about the financial structure of Vedanta Resources, the parent entity of Vedanta Limited. 

The allegations triggered a sharp sell-off, with Vedanta’s share price falling by 5% and Hindustan Zinc down by 2.5% as of 12:25 PM on July 9, 2025. 

US-Based Short Seller Viceroy Research Takes Aim at Vedanta Resources

Viceroy Research publicly announced that it is shorting the debt stack of Vedanta Resources. The firm alleged that the group’s financial model is fundamentally flawed and unsustainable. According to the report, Vedanta Resources relies on a continuous flow of funds from its subsidiaries to manage its debt obligations, making the structure risky for creditors.

Allegations of a Cash Drain from Vedanta Limited

At the heart of the report lies a claim that Vedanta Limited is being used as a cash source to service debts at the parent company level. This upstream movement of funds, as described by the Viceroy, creates a systemic risk and weakens the financial independence of the subsidiary. The report refers to Vedanta Resources as a “parasite” entity in its description of this flow of capital.

Accusations of Accounting Irregularities and Misrepresentation

Viceroy Research’s report also highlights multiple alleged financial irregularities. These include manipulation of auditors, underreporting of interest expenses, off-record liabilities, and inflated capital expenditure figures. The report suggests that these practices mask the true financial condition of the group.

Demerger Plan Raises Further Questions

The firm also criticised Vedanta’s proposed demerger strategy, stating that the move does not solve the ongoing liquidity concerns. Instead, the new entities could inherit significant levels of debt, creating further complications and financial stress across the restructured group.

Vedanta Group Stocks: Vedanta and HindZinc Share Price Falls 

Following the release of the report, Vedanta’s share price experienced a notable decline of 5%. Hindustan Zinc also saw a drop of 2.5%, while Sterlite Technologies remained in focus. These movements indicate investor anxiety over the implications of the allegations on the group’s financial health.

Read More: NIFTY Metal Index Falls Nearly 2% as US Adds Tariff on Copper Imports! 

Conclusion 

Viceroy concluded its report by stating that even if one of the identified risks materialises, it could lead to a major destabilisation of the group’s structure. The market seems to have taken the warnings seriously, with Vedanta Group stocks witnessing sharp corrections in an otherwise stable session.

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