Why Vedanta Share Price Crashed 8% Today: Viceroy Report Explained

Shares of Vedanta Ltd and Hindustan Zinc Ltd plunged sharply on Wednesday, July 9, after US-based short-seller Viceroy Research published a scathing report comparing parent company Vedanta Resources Ltd to a “Ponzi scheme.”

The report alleged financial irregularities, unsustainable debt practices, and manipulation of internal cash flows, sending shockwaves through the market.

Vedanta Share Price Nosedives on BSE and NSE
Vedanta Ltd shares dropped as much as 7.7% intraday on the BSE to hit a low of Rs 421, before slightly recovering to Rs 439.60, still down 3.64%.

On the NSE, the stock mirrored this pattern, opening at Rs461 and plunging to Rs 420.65, before trading at Rs 439.35, down 3.71% at the time of writing.

Hindustan Zinc Ltd (HZL) was also caught in the selloff, falling 4.8% to Rs 415.30.

Viceroy’s Explosive Report: “Vedanta Resembles a Ponzi Scheme”
The catalyst behind the crash was Viceroy Research’s detailed report, which claimed: “Vedanta Resources Ltd is a ‘parasite’ holding company with no significant operations of its own, propped up entirely by cash extracted from its dying ‘host’: Vedanta Ltd. This creates a self-destructive feedback loop,” the report stated.

It further alleged that Vedanta Resources cannot meet its short-term obligations without draining Vedanta Ltd through unsustainable dividends and brand fees. Viceroy added: “This strategy resembles a Ponzi scheme.”

Debt Pile, Interest Costs, and Capitalised Expenses
The report highlighted significant concerns around Vedanta Resources’ $4.9 billion standalone net debt (as of March 31, 2025), questioning how interest payments exceed reported borrowing rates.

“Despite trimming its gross debt by $3.6 billion since FY21, Vedanta Resources’ effective interest rate jumped from 6.4% to 15.8%,” Viceroy noted, calling this unreconcilable with the company’s reported borrowings.
 

Additionally, it alleged that Vedanta capitalised many operating expenses to artificially inflate profits and asset values, terming this a “material misrepresentation.”

Spin-Off Plan, Governance Questions, and Desperate Measures
The timing of the report is critical, coming as Vedanta plans to split into multiple listed entities, a move spearheaded by Chairman Anil Agarwal after his failed 2020 bid to take the company private.

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Hindustan Zinc Also Under Fire
Viceroy’s report didn’t spare Hindustan Zinc either, calling it a: “Legal and financial minefield… entangled in contract breaches, regulatory violations, and related-party transactions designed to extract value at the expense of the Indian public.”

Background: A Familiar Name in Short-Selling Circles
Viceroy Research has a history of exposing major financial frauds, including Wirecard and Steinhoff, lending significant weight to its allegations.