Viceroy, known for its activist short reports, alleged that VRL has no meaningful operations of its own and survives by extracting capital from Vedanta. 'This looting erodes the fundamental value of Vedanta, which constitutes the primary collateral for VRL's own creditors,' the report stated.

The report also accuses the group of indulging in questionable financial practices, including inflated asset values, off-balance sheet liabilities, and capital expenditure misstatements. It flagged governance failures and criticized the proposed demerger plan as a smokescreen that does not resolve the group's deep-rooted cash crunch.

Vedanta, which operates in metals, mining, and energy, is the primary cash engine of the group. According to Viceroy, 'To get the cash it needs, VRL forces Vedanta to declare disproportionately large dividends, funded not by free cash flow but by taking on more debt and weakening its balance sheet.'

Investor sentiment remained cautious as markets digested the implications of the report.

Vedanta, a subsidiary of Vedanta Resources, is one of the world’s leading natural resources, critical minerals, energy, and technology companies, spanning across India, South Africa, Namibia, Liberia, the UAE, Saudi Arabia, Korea, Taiwan, and Japan, with significant operations in oil & gas, zinc, lead, silver, copper, iron ore, steel, nickel, aluminum, power, and glass substrate.

Vedanta's consolidated net profit surged 154.42% to Rs 3,483 crore while revenue from operations jumped 13.89% to Rs 39,789 crore in Q4 March 2025 over Q4 March 2024.