Shares in Reliance Communications, controlled by billionaire Anil Ambani, have been under pressure in recent years due to debt, fierce competition, and several unsuccessful attempts to raise funds by selling assets.
The Veritas report, which was dated June 8 but was widely circulated in India on Tuesday, said it sees "significant additional downside" in the company's stock and said it did not think the company's accounting policies "provide a clear picture of the underlying operating and business trends."
Veritas has written a handful of reports highly critical of Indian companies.
Reliance Communications, India's No.2 cellular carrier by subscribers, said the report "lacks any credibility."
"The report is full of factual inaccuracies, and baseless allegations masquerading as research," the company said in an emailed statement.
"RCOM is fully compliant with all applicable accounting policies and standards," the company said.
The shares pared losses to end 2.5 per cent lower at Rs 63.55 on the BSE, while the Sensex rose 0.92 per cent to 16,859.80.
Copyright Thomson Reuters 2012