India’s market regulator SEBI has put the Sterlite Electric IPO in abeyance after US-based short seller Viceroy Research alleged malpractice and regulatory violations against parent company Vedanta Group. Sterlite Electric, formerly Sterlite Power Transmission, planned to raise ₹1,500 crore through a mix of fresh equity and Offer for Sale, chiefly for expansion, debt repayment, and upgrading its Vadodara plant. The allegations include unlawful fund expatriation and tax evasion, prompting SEBI to request further information from Vedanta and its related entity, Hindustan Zinc. The company’s Draft Red Herring Prospectus reflected increased scrutiny and the regulator’s pending decisions. Despite these developments, Vedanta shares have remained stable, rising 10% since July’s first report. The IPO will move forward only after SEBI completes its verification and resolves the outstanding compliance matters. This episode highlights ongoing challenges facing Indian capital market transparency.
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