Vedanta Chairman Anil Agarwal fends off Viceroy Research's volleys

Chairman vows transparency after US short-seller's allegations

Vedanta Chairman Anil Agarwal on Thursday vowed the company's unflinching commitment to transparency, a day after US-based short-seller Viceroy Research released a report accusing the group’s London-based parent, Vedanta Resources Limited, of running a “ponzi-like” structure. 

The report alleged widespread financial misconduct, accounting fraud, and rising insolvency risks across the conglomerate.

Addressing shareholders at the company’s 60th annual general meeting (AGM), Agarwal said: “Regarding the report, we are extremely transparent. Disclosure and transparency are fundamental values for us, and they are our strength.” “This appears to be a motivated report, but we will address it,” he added.

 

Vedanta Resources Chief Executive Officer (CEO) Deshnee Naidoo, said there is no information in the US-based short seller Viceroy Research’s report released on Wednesday, which India listed Vedanta Ltd has not voluntarily shared previously. 

 

“As the chairman said, it is all about the disclosures and the transparency that we have maintained with you over the decades. The authors of the report have compiled only part information, filled with gross inaccuracies, which you (shareholders) have also discerned as part of this meeting,” she said. 

Responding to shareholders' queries on the timeline for the demerger, Agarwal said the process is expected to be completed before September. 

Agarwal said all four demerged entities have the potential to grow into a $100-billion enterprise. The demerger will split Vedanta into five separate entities, Vedanta Aluminium, Vedanta Oil and Gas, Vedanta Power, Vedanta Iron and Steel, and Vedanta. 

“Your (addressing the shareholder) company is also moving forward to unlock maximum value for all of you. We are in an advanced stage of restructuring our business by moving to a pure-play model. Our demerger proposal has received support from over 99.5 per cent of shareholders and creditors.” said Agarwal. 

He explained that the company is now focusing on three points, demerge, diversify and deleverage. 

In terms of capital expenditure (capex), Naidoo said that the company’s aim is to reduce India's import substitution of natural resources to zero. She also noted that only 2 per cent of the company’s revenue is exposed to the US tariffs. 

“To support that we are allocating $5.5 billion to $6 billion, that's ₹50,000 crore to growth capex over the next three to four years. This will take our annual Ebitda (earnings before interest, taxes, depreciation, and amortisation), as we've already guided the market towards $10 billion,” she explained.

 

Vedanta shares closed flat at ₹439 on Thursday, while HZL slipped 0.6 per cent to ₹422. 

JP Morgan retains stance 

Global brokerage firm JP Morgan said it is not getting distracted by claims and remains long on Vedanta. It retained its “overweight” stance on the company. “We remain OW (overweight) on VEDLN (Vedanta) and its bonds (’28s,’29s, ’30s, ’31s) while being neutral on VEDLN (Vedanta) ’33s,” the report stated.

 

“We have generally focused on Vedanta’s cash flows and earnings excluding Hindustan Zinc to unravel the key drivers of the credit. Vedanta, excluding Hindustan Zinc reported Ebitda of $3.1 billion in FY25 and a net leverage of 2.2 times. We struggle to see financial stress at Vedanta with these metrics,” it said.

  In terms of tax dispute, JP Morgan noted that Hindustan Zinc has reported tax and other claims of about ₹151.5 billion, which are under litigation.