Credit rating agency CRISIL has reaffirmed its ratings on Vedanta Limited (VEDL) and Hindustan Zinc Limited (HZL), even as a scathing report from short-seller Viceroy Research questioned Vedanta’s corporate governance and raised concerns about its semiconductor unit.
In a note, CRISIL said:
“We have taken note of the recent short-seller report. However, there has been no adverse reaction from any lender or investor at present. Ratings on Vedanta and Hindustan Zinc remain unchanged.”
Viceroy alleges sham operations at Vedanta Semiconductor
On July 18, 2025, Viceroy Research released a report titled “Vedanta – Vedanta Semiconductor: ₹2,500 Crore Dhoke Ka Sammraajy”, alleging that Vedanta’s subsidiary, Vedanta Semiconductors Private Limited (VSPL), is merely a shell company set up to siphon funds offshore and disguise a liquidity crisis.
According to Viceroy:
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Liquidity crisis & VSPL creation: In April 2024, Vedanta allegedly faced a severe liquidity crunch after PSU banks cut lending. The company raised ₹2,454 crore via NCDs secured against Hindustan Zinc shares. These funds were routed through VSPL, purportedly for a commodities trading loan at 12% interest — higher than Vedanta’s existing 10% NCD rate.
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Suspicious operations: VSPL reportedly posted ₹416 crore in revenue from trading copper, gold, and silver — but with no inventory, no logistics, no trade credit, and negligible margins. Meanwhile, its assets were liquidated during FY25.
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Governance & audit concerns: Viceroy highlighted VSPL’s ties to the Agarwal family and raised red flags about its auditor MP Chitale & Co., which has been linked to other controversial audits.
The report claimed that VSPL’s supposed semiconductor venture — originally planned with Foxconn in 2023 — never progressed beyond announcements. There were no visible signs of capex, land acquisition, R&D, or permits.
What’s next?
While CRISIL maintained its ratings for now, citing no immediate lender or investor reaction, Viceroy warned that the facade could crumble once regulators scrutinize VSPL’s operations more closely.
The allegations put fresh focus on Vedanta’s governance practices and its ability to service debt amid a challenging financial environment.
Disclaimer: All statements, data, and quotes attributed to Viceroy Research in this article are as per their July 18, 2025, report. Business Upturn and the author are not responsible for the veracity of the claims or opinions expressed therein.
