Corporate Grapevine     

Published: September 30, 2025
Updated: September 30, 2025

Regulatory alarm bells over debt-hit Vedanta

Anil Agarwal-owned Vedanta Resources Ltd is facing mounting regulatory and legal pressure across multiple jurisdictions, with a fresh report by short-seller Viceroy Research warning that the metals and energy conglomerate “no longer enjoys the quiet backing of regulators or the State.” This was despite the Supreme Court rejecting a petition to investigate the group thoroughly.

The Viceroy report said Vedanta failed to raise $ 1 billion from the bond market to repay a $ 550 million private credit facility, leaving it with limited liquidity to meet near-term obligations, including a $ 204 million mandatory investment in Zambia’s Konkola Copper Mines.

In India, court cases this week have put Vedanta in conflict with the government and market regulators. The Ministry of Coal has also sought to invoke a Rs 263-crore performance guarantee tied to a stalled coal block.

Viceroy said the Enforcement Directorate’s referral and a parallel probe by Singapore’s Commercial Affairs Department mark “a shift in tone from key stakeholders,” urging bondholders to reassess assumptions about Vedanta’s institutional support and its ability to extract cash from India.

DEMERGER BLUES

Vedanta Resources Ltd’s ambitious plan to split its sprawling metals and mining empire into multiple pure-play listed entities faces growing uncertainty amid intensifying regulatory and legal action in India and abroad.

The group’s demerger — once slated for completion by September 2025 — now risks indefinite delay after the Securities and Exchange Board of India (SEBI) filed an intervention and issued a warning letter questioning the restructuring’s compliance and disclosure standards. According to a report by Viceroy Research, “SEBI has filed an intervention and issued a Warning Letter to Vedanta Limited regarding its demerger,” while the Government of India has accused the company of “misrepresentation, concealment of liabilities, and breaches of law.”

The report added that the government has gone further, alleging that “in all probability (Vedanta-owned) MALCO will go into liquidation,” suggesting that the demerger could have been designed to avoid dues owed to the state.

Legal headwinds and a liquidity crunch —following Vedanta’s failed $ 1 billion bond issue — have compounded investor anxiety over whether the group can sustain its planned separation across six verticals.

Viceroy warned that the “credit story moves into the courtroom,” raising doubts over whether the demerger will proceed as envisaged, or become another casualty of Vedanta’s widening stand-off with regulators and lenders.