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News Topical, Digital Desk : Market regulator SEBI has put Sterlite Electric's IPO on hold. SEBI took this action following allegations leveled by American short seller Viceroy Research against Sterlite Electric's parent company, Vedanta Group. Moneycontrol reported this information, citing two people familiar with the matter. SEBI is investigating Viceroy Research's allegations. SEBI typically puts an IPO on hold when non-compliance is discovered or if the regulator's investigation is pending or ongoing. Once the issues are resolved, SEBI usually gives the green light.
What information did the company provide?
Sterlite had stated in its draft, "Several reports have been issued by a short seller making certain allegations against the Vedanta Group. SEBI, vide its emails dated August 18, 2025 and September 4, 2025, has sought information and documents from Hindustan Zinc to be produced before the investigating officer under sections 11(2) and 11C(2), (3) of the SEBI Act, in relation to the alleged transactions mentioned in the short seller reports. Hindustan Zinc was required to produce such documents by August 25, 2025 and September 12, 2025, respectively, to which it has submitted its response to SEBI on August 25, 2025 and September 12, 2025. The matter is pending." What are Viceroy Research's allegations? Viceroy Research has alleged in several reports that Vedanta's management is diverting funds from Vedanta Limited to support its highly indebted parent company, Vedanta Resources. In July, the short-selling firm stated that Vedanta Resources could soon default on its debt. The Vedanta Group's entire structure is financially unstable, operationally weak, and poses a serious risk to creditors. Subsequently, in another report, the research firm claimed that Vedanta Group's semiconductor unit was not a manufacturing business but a "shell commodity trading operation," deliberately designed to avoid being classified as a non-banking financial company (NBFC). Viceroy Research claims that Vedanta Limited's subsidiary, Vedanta Semiconductors Pvt Ltd (VSPL), was part of a specific scheme. Through this, Vedanta Limited remitted brand fees to Vedanta Resources in April 2025, at a time when the group was facing a severe liquidity crisis. The short seller has also accused the company of regulatory violations. The report states that Singapore authorities are investigating a large remittance of $1.27 billion involving the Vedanta Group. Viceroy Research has exposed several weaknesses in Vedanta's business. Following Viceroy Research's initial report in July 2025, further reports were published in September and October. Vedanta has rejected all the allegations made in the short seller's reports, calling them baseless. The company says this is a method of spreading falsehoods against it. "Since the allegations made by Viceroy Research are serious, SEBI is investigating the matter," one person told Moneycontrol. "However, this is not an investigation at this time, but rather a verification of the facts. This could take a few months ." Another person added, "In the past, SEBI has initially put several IPOs on hold. After the issues were resolved, they were approved."
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