A Public Interest Litigation (PIL) has been filed in the Supreme Court of India, calling for an investigation into the allegations made by US-based short seller Viceroy Research against the Vedanta group. The petition, filed by advocate Shakti Bhatia, urges action from the Centre, Securities and Exchange Board of India (SEBI), and the Reserve Bank of India (RBI).

Allegations and Report Details

Viceroy Research, in its 87-page report, labeled Vedanta Resources as a 'parasite' holding company. The report claims that Vedanta Resources is draining Vedanta Limited, leading to increased debt and cash depletion. Specifically, the allegations include:

• Violations of SEBI's Fraudulent and Unfair Trade Practices (FUTP) norms
• Non-compliance with Listing Obligations and Disclosure Requirements (LODR) regulations
• A group structure described as 'financially unsustainable'

Petitioner's Claims

The PIL asserts that parts of Viceroy's allegations can be corroborated using publicly available information. This claim adds weight to the petitioner's request for a thorough investigation by regulatory bodies.

Viceroy's Stance

Gabriel Bernarde, Co-Founder of Viceroy Research, expressed strong views on Vedanta's financial situation:

• Predicted that Vedanta Resources is likely to default
• Stated that Vedanta Limited lacks the capacity to cover interest costs

Vedanta's Response

Vedanta has firmly rejected the allegations, characterizing them as a 'malicious combination of selective misinformation and baseless allegations.' The company stated that:

• The report was issued without contacting Vedanta for clarification
• The timing of the report's release is suspect

Implications and Next Steps

The filing of this PIL in the Supreme Court marks a significant escalation in the scrutiny of Vedanta's corporate structure and financial practices. As the case unfolds, it may have far-reaching implications for:

• Corporate governance standards in India
• The role of short sellers in the Indian market
• Regulatory oversight of complex corporate structures

Investors and market watchers will be closely monitoring the Supreme Court's response to this PIL and any subsequent actions by SEBI, RBI, or other regulatory bodies.

Vedanta Limited , a diversified natural resources company, has reported its highest-ever first quarter EBITDA, demonstrating strong operational performance amid global market volatility.

Financial Highlights

• Consolidated revenue increased 6% year-on-year to ₹37,434.00 crore
• Record Q1 EBITDA of ₹10,746.00 crore, up 5% YoY
• EBITDA margin (excluding Copper) expanded by 81 basis points to 35%, highest in the last 13 quarters
• Adjusted PAT surged 13% YoY to ₹5,000.00 crore; reported PAT stood at ₹4,457.00 crore
• Strong double-digit Return on Capital Employed at 25%, improved by 87 basis points YoY

Operational Performance

Vedanta achieved significant operational milestones across its business segments:

Aluminium

• Record quarterly alumina production of 587 kt, up 9% YoY
• Lowest hot metal cost (ex-alumina) at $888.00/t in the last 16 quarters

Zinc India

• Highest-ever first quarter mined metal production at 265 kt, up 1% YoY
• Lowest Q1 zinc cost of production at $1,010.00/t, down 9% YoY

Zinc International

• Mined metal production jumped 50% YoY to 57 kt, with Gamsberg's production surging 74% YoY

Oil & Gas

• Production at 93.2 kboepd, with natural decline partially offset by infill wells brought online

Iron Ore

• Saleable iron ore production up 42% YoY to 1.8 million tonnes

Power

• Total power sales increased 33% QoQ, with TSPL achieving 90% plant availability

Strategic Developments

Vedanta made progress on several strategic initiatives:

• Generated ₹3,028.00 crore from a 1.6% stake sale in Hindustan Zinc Limited
• Commissioned 950 MW of merchant power capacity year-to-date, increasing total merchant power generation capacity to 3.83 GW
• Hindustan Zinc board approved a 250 ktpa integrated expansion
• Meenakshi Unit 3 (350 MW) and Athena Unit 1 (600 MW) power plants commissioned

Financial Position

• Net Debt/EBITDA ratio improved to 1.3x from 1.5x in the previous year
• Cash and cash equivalents of ₹22,137.00 crore, up 33% YoY
• Credit rating reaffirmed at AA by both CRISIL and ICRA

Management Commentary

Anil Agarwal, Chairman of Vedanta, stated, "Our Q1 performance has set a strong foundation for the year ahead. Amidst global market volatility, we delivered the highest-ever first quarter EBITDA. The ramp-up of the Lanjigarh refinery to 587kt demonstrates our progress towards delivering over 3 MnT of Alumina in FY26."

Ajay Goel, CFO of Vedanta, added, "This strong performance, alongside corporate initiatives such as the HZL stake sale, has enabled Vedanta to deliver a Net Debt to EBITDA ratio of 1.3x. The cost of our debt has reduced by around 130bps YoY to 9.2%."

Vedanta's robust Q1 performance, marked by record EBITDA and significant operational achievements, positions the company well for continued growth. The management's focus on cost optimization, operational efficiency, and strategic expansions is expected to drive further value creation for shareholders.