Why SEBI has put Sterlite Electric's IPO on hold
What's the story
The Securities and Exchange Board of India(SEBI) has put the Initial Public Offering (IPO) of Sterlite Electric on hold. The decision comes after US-based short seller Viceroy Research made allegations against its parent company, Vedanta Group. The regulator is currently conducting a fact verification exercise into these claims and has requested relevant information from Hindustan Zinc, a related entity.
IPO specifics
Sterlite Electric filed offer document in early October
Sterlite Electric, a Vedanta Group subsidiary, had filed its offer document earlier this month. The company planned to raise funds through a combination of fresh issue and an Offer for Sale (OFS) by the promoter and existing shareholders. The total size of the IPO was estimated at ₹1,500 crore.
Allegation details
Viceroy Research's allegations against Vedanta Group
Viceroy Research has accused the management of Vedanta Group of draining resources from its Indian-listed entity to support its highly leveraged UK parent company. The allegations include serious regulatory violations such as unlawful fund expatriation and tax evasion. Sterlite Electric disclosed in its offer document that SEBI had sought information from Hindustan Zinc for transactions alleged in these reports, which was submitted on August 25 and September 12, respectively.
Market impact
Vedanta shares have remained stable amid allegations
Viceroy Research's first report in July 2025 was followed by more in September and October. Despite the serious allegations, Vedanta's shares have remained unaffected, rising by about 10% since July when the first report was published. The resilience of Vedanta's stock amid these allegations highlights the complex dynamics of market reactions to corporate controversies.