Vedanta shares trade 1% lower ahead of 60th AGM; here is what happened in last 24 hours

In the morning trade on Thursday, the stock slipped as much as 1% to ₹436.30 on the NSE.

The company will hold its 60th annual general meeting (AGM) today.

In its June 18 filing to stock exchanges, Vedanta said that the 60th annual general meeting (AGM) of the company is scheduled to be held on Thursday, July 10, 2025, at 3:00 PM through video conferencing (VC)/other audio-visual means (OAVM).

The stock has been under pressure after US short seller Viceroy Research on Wednesday called billionaire Anil Agarwal-led British firm Vedanta Resources a "parasite" that is "systematically draining" its Indian unit, an allegation which the group called "selective misinformation and baseless" aimed at discrediting it.

The US firm took a short position against the debt of Vedanta Resources, the UK-based parent of Indian miner Vedanta Ltd, alleging that the group "is a house of cards built on a foundation of unsustainable debt, looted assets, and accounting fiction."

Shorting debt, also known as short selling of bonds, is a trading strategy where an investor looks to profit from a decline in the price of bonds or other debt instruments. It involves borrowing the bond, selling it at the current market price, and then buying it back later at a potentially lower price to return to the lender, pocketing the difference as profit.

Vedanta responded, saying the report was "a malicious combination of selective misinformation and baseless allegations" and that its authors issued it without contacting the group.

"Vedanta Resources Ltd (VRL) is a 'parasite' holding company with no significant operations of its own, propped up entirely by cash extracted from its dying 'host': Vedanta Ltd (VEDL)," Viceroy said in an 85-page report.

VEDL has paid dividends worth ₹75,800 crore in the last four fiscal years, while its unit Hindustan Zinc paid another ₹57,300 crore over the same period. 56.38% of the dividend payout at Vedanta went to Vedanta Resources in line with its shareholding and 61.62% to Hindustan Zinc.

Viceroy said Vedanta Ltd has accrued a $5.6 billion free cash flow shortfall against dividends over the last 3 years, while its net debt has increased by $6.7 billion (around 200%) since FY22.

"VEDL has depleted its cash reserves and exhausted its ability to borrow money and 'liquidate' working capital items," it said.

"We see only three possible explanations, all of which suggest a level of financial misconduct: Undisclosed, off-balance sheet debt is being serviced, with the costs disguised as interest expenses. This would be fraud. (Secondly) high-cost intra-period loans are being used and repaid before reporting dates to mask the true level of debt. (And thirdly) loan rates or conditions are materially misreported to the market," it said.

The same phenomenon is observed at Vedanta Limited, where actual interest expenses in FY25 were $368 million higher than its reported weighted average borrowing costs would suggest, implying significant intra-period borrowing to manage liquidity.

This is supported by Vedanta's precarious working capital ratio, which has been well below 1.0 since FY23, indicating its current liabilities vastly exceed its current assets, the report said.

The report came on a day before Agarwal, chairman of Vedanta Ltd, is to address the company's shareholders at the annual general meeting.

What Vedanta says

"The timing of the report is suspect and could be to undermine the forthcoming corporate initiatives. Our stakeholders are discerning enough to understand such tactics," Vedanta said.

"In fact, to avoid any responsibility, authors of the report have added various disclaimers that the report has been prepared for educational purposes only and expresses their opinions and are not statements of fact."

Vedanta said it remains focused on the business and growth and requested everyone to avoid speculation and unsubstantiated allegations.

Viceroy Group's response

In response, the Viceroy Group wrote on "X" that Vedanta has dismissed its 85-page 'thoroughly referenced' report without any attempt to disapprove of their work. "This is likely because they cannot refute our findings. We stand behind our work and are happy to take questions," Viceroy said.

The strategy to make a profit from a declining stock deployed by Viceroy is the same as that used by another US short seller, Hindenburg Research, in January 2023 against the Adani Group.

Hindenburg, which has since shut down, had called the alleged "brazen stock manipulation and accounting fraud" by the Adani Group.

While the Adani Group refuted the allegations, calling them "baseless" and "malicious", the Hindenburg report led group stocks to lose as much as $150 billion in value at their lowest point.