The shares of Vedanta Ltd plunged by as a lot 8.7 per cent to Rs 421 intraday, and that of Hindustan Zinc by 5 per cent to Rs 415, after Viceroy Analysis, a short-seller and US-registered monetary analysis group, flagged the Vedanta Group for carrying “unsustainable debt”. The shares have recouped a part of the losses since.
The analysis group claimed that the Vedanta holding corporations — Vedanta Sources Restricted (VRL) together with intermediate holding corporations above Vedanta Restricted (VEDL) — resemble “a monetary zombie” with “roughly $4.9 billion in gross interest-bearing liabilities as of FY25” however “no important operations of its personal,” being “propped up solely by money extracted from” its subsidiary VEDL.
In a media assertion, the Vedanta Group described the Viceroy report as “a malicious mixture of selective misinformation and baseless allegations,” issued with the only goal of making false propaganda, and “with out making any try to contact” the Group.
“It solely incorporates compilation of varied info — which is already within the public area, however the authors have tried to sensationalise the context to profiteer from market response. The timing of the Report is suspect and might be to undermine the forthcoming company initiatives,” the Vedanta assertion mentioned.
Viceroy Analysis acknowledged it’s a quick vendor and that it stood to revenue if the Vedanta shares fell because of its report. “As of the publication date of this report, it’s best to assume that the authors have a direct or oblique curiosity/place in all shares (and/or choices, swaps, and different spinoff securities associated to the inventory) and bonds lined herein, and due to this fact stand to understand financial positive factors within the occasion that the worth of both declines,” the Viceroy report mentioned in a disclaimer.
“To service its personal debt burden, VRL is systematically draining VEDL, forcing the working firm to tackle ever-increasing leverage and deplete its money reserves. This looting erodes the elemental worth of VEDL, which constitutes the first collateral for VRL’s personal collectors… (and) drives the rise within the Group’s insolvency danger,” the report mentioned.
In a publish on social media platform X, former Rajya Sabha MP and BJP nationwide govt member Swapan Dasgupta mentioned: “Is there a concerted try by dodgy US monetary entities/ analysis organisation to undermine India’s corporates/ monetary establishments? There are too many coincidences. I feel the safety businesses ought to examine.”
Is there a concerted try by dodgy US monetary entities / analysis organisation to undermine India’s corporates/ monetary establishments.? There are too many coincidences. I feel the safety businesses ought to examine.
— Swapan Dasgupta (@swapan55) July 9, 2025
The Viceroy report identified that the Vedanta Group’s gross finance prices and efficient rate of interest rose persistently from $1.3 billion (7.2%) in FY21 to $2 billion (13%) in 2025, whereas the Group’s gross interest-bearing liabilities fell from $17.5 billion in FY21 to $15.6 billion in 2025.
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Nevertheless, the report famous that the Group’s money and short-term investments have fallen from $5.9 billion in FY21 to $2.6 billion in FY25. “Internet debt has elevated, as money and short-term investments have been depleted at a disproportionately larger charge than debt has been repaid,” it mentioned.
The report claimed that Vedanta’s “proposed demerger will merely unfold the Group’s insolvency throughout a number of, weaker entities, every burdened with a legacy of impaired belongings and unserviceable debt.”
Based and chaired by Anil Agarwal, Vedanta Group is a world conglomerate, primarily centered on India. Listed on the Bombay Inventory Change and the Nationwide Inventory Change, Mumbai-based VEDL is a “uniquely diversified firm throughout the pure assets spectrum.” VRL, the London-based holding firm, was based in 2003.
In line with a disclosure to SEBI on July 5, encumbrance over 220.5 crore fairness shares of VEDL, representing 56.38% of the entire share capital held by VRL by way of intermediate holding corporations, was launched following the total compensation of a $200 million facility settlement, for which a no-objection certificates was obtained from Canara Financial institution London Department on July 3.
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Vedanta Restricted inventory motion on July 9. (Screenshot: BSE)
Based in 2016 by British quick vendor Fraser John Perring with Australian companions Aiden Lau and Gabriel Bernarde, Viceroy Analysis LLC claims to be an investigative monetary analysis group registered in Delaware, United States. On its web site, Viceroy says its analysis has raised purple flags on many corporations, together with Wirecard, the German fee big that filed for chapter in 2020.
A number of “materials quantitative and qualitative discrepancies” listed within the Viceroy report embrace claims that “Vedanta’s curiosity bills vastly exceed its reported notice charges, bills throughout working subsidiaries are systematically capitalized, and billions of {dollars} of disputed bills are saved off-balance sheet and undisclosed in monetary reviews.”
‘Unsustainable’ Dividends
VEDL has paid “disproportionately massive” dividends totalling $10.7 billion (₹85,503 crore) since FY21, persistently exceeding its free money stream and accrued $5.6 billion free money stream shortfall during the last 3 years, the report identified.
Claiming that VRL’s financing wants dictate VEDL’s dividends, that are “funded not by free money stream however by taking over extra debt,” the report known as this upstreaming course of “extremely inefficient” as a result of “a good portion of each dividend issued leaks to minority shareholders.”
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‘Synthetic Model Charges’
In line with the report, VRL extracts tons of of thousands and thousands of {dollars} yearly from VEDL and its subsidiaries by way of “model charges” that lack any business justification and are “designed to bypass dividend leakage to minority shareholders, together with the federal government of India.”
In FY24 alone, the report mentioned, these charges amounted to $338 million, representing 37% of the online revenue of VEDL and its subsidiaries. By comparability, it identified, Tata Metal’s model charges are 0.25% of the turnover, capped at ₹200 crore ($24.01m) “regardless of working a model with far higher public recognition and that’s truly getting used.”
Loans from subsidiaries
In line with Viceroy, VRL makes use of loans from VEDL subsidiaries to aggressively buy extra VEDL inventory in “blatant violation of the Firms Act.” Additionally, over $122 million of the mortgage was “written off” and by no means repaid to VEDL, mentioned the report.