investors not buy any of the group's shares "at any price, unless a new management is put in charge and the financials cleansed of malfeasance." IndiaBulls promptly denied any wrongdoing.
"The disclosures made by Indiabulls Real Estate Limited (IBREL) as well as IndiaBulls Power Limited (IBPOW) are unreliable," said the report titled "Bilking India" and authored by analysts Neeraj Monga and Nitin Mangal.
"The sole purpose of IBREL is to bilk institutional and retail investors for the benefit of select insiders," said the August 1 report, circulated widely within India's financial community.
It cautioned institutions providing debt funding to IBPOW to check its reported net worth "with a fine toothcomb."
IBREL, the report said, does not have the track record of delivering on its promises and was unlikely to fulfill its commitments to institutional and retail investors.
Shares of Indiabulls Real Estate fell 13% before recovering to close 2.4% down at Rs. 54.
Indiabulls Financial Services was down 9.3% before closing at Rs. 210, down 0.8%, while IndiaBulls Power fell 13.5% before closing at Rs. 13, down 3.2%.
IndiaBulls group hit back at Veritas accusing the research agency of "malafide intentions" and "intentional profiteering."
"The company will initiate appropriate criminal proceedings on the authors of the research report for publishing false and factually incorrect data, to create sensation and entice people for benefitting through trading, for the sole purpose of selling their research reports for money," it said.
Capital markets watchdog Securities Exchange Board of India (SEBI) did not comment but an official of the regulator told HT, "We will review the report thoroughly first and only thereafter we can decide if any necessary action needs to be taken."
Last year, Veritas, a little-known boutique researcher, created a flutter with a no-holds-barred commentary on the separation of Reliance Industries Ltd's (RIL's) assets.
The report alleged that RIL had caused a Rs. 25,000-crore loss to its shareholders by demerging its communications business and transferring it through a series of transactions to younger brother Anil five years ago.
It followed it up with a similar report on Kingfisher Airlines and its parent UB Holdings, observing both firms is effectively "insolvent."
In March this year, Veritas had published another report dubbing India's largest realtor DLF "a crumbling edifice."