Five big concerns flagged by Viceroy Research in its 87-page report on Vedanta

Vedanta Resources is an Indian billionaire Anil Agarwal -based London -based mining company.

Mint It breaks down the five most important issues marked by Viceroy Research.

1. to finance debtor dividends, not profit

Vedanta Resources claimed that Vedanta forced him to declare a large dividend without disproportionate to fulfill his debt obligations. These dividends are financed by the Indian company that borrows the balance sheet.

In the last three years, VEDL has paid over $ 8 billion dividends. The company’s cash flows fell about 5.6 billion dollars from meeting Viceroy’s forecasts. The short seller implied that the company borrowed more to meet this deficiency.

The net debt, which VEDL includes its working capital, has increased by 200% since 22 financial years.

2. Interest costs that do not collect

It is claimed that both Vedanta Resources and Vedanta have higher interest costs that the disclosed debts have to be created. The VRL reported an interest cost of $ 835 million in the 25-fiscal year against the gross debt of 4.9 billion dollars, ie the effective interest rate is 15.8%, which is higher than 9-11% on public loans and interest in period loans. Similarly, the subsidiaries showed extra interest expenses of $ 368 million, which shows that it was borrowed for short periods of time to meet daily cash needs. Viceroy report said.

3. Cash extraction through brand fees and loans

Viceroy accused VRL of spending cash from Vedl. One way to do this is to charge brand fees that do not use brand name even from affiliates such as Hindustan Zinc and Esl Steel. Except for Vedanta LTD, none of the companies paying brand fees use the farewell brand in a significant way, but in bulk, they paid $ 361.3 million in the trademark fees in 25 financial years. Vedanta Ltd paid Vedanta Resources to Vedanta Resources in the last four years, even if VRL is not London staff, and will allow the office ‘to allow’.

In another case, Vedl gave a loan of $ 956 million to VRL companies, some of them were never repaired and later written. Viceroy claims that some of the revenues are used to buy VEDL shares from the open market. Simply put, the organizer is claimed to increase the control over VEDL using Vedl’s own money.

4. Corporate Management Issues

The Vedanta, led by Anil Agarwal, often announced great investments in sectors such as semiconductors or nuclear energy, which facilitates to create a good publicity and borrow money. However, most of these projects never come true, Viceroy Viceroy said. Instead, it is claimed that the money borrowed for projects is used to pay cash to the parent company. As a result, real expansion projects were postponed and financed inadequate. Although the short seller spends a lot of farewells, there is not much improvement in his business because most of the money goes to protect old beings and does not grow new ones.

The short seller also said that Vedanta Resources employed auditors among the subsidiaries that are banned by India Reserve Bank or sanctioned in the UK. Apart from 2023, several senior executives have resigned, including Vedanta Aluminum CEO, Hindustan Zinc CEO and Vedanta LTD CFO. The leadership complex shows that there are internal disputes, and according to Viceroy, it gives a bad appearance for the future of the company.

Viceroy describes the institutional governance in Vedanta as a pattern of manipulating investors through deception, neglecting basic assets, and manipulating the regulatory gaps through the supervisor arbitrage.

5. too much legal and regulatory problem

According to Viceroy, Vedl is obliged to have a number of legal and regulatory difficulties in internal controls, governance and supervision.

According to the short seller, Vedanta Ltd made 107 responsibilities for Tata Steel and 107 responsibilities compared to 3 for JSW Steel between 2022 and 2025. These include tax requests, contract disputes and environmental problems related to the other parties and the government.