Mumbai, July 9 -- The selloff was triggered by a detailed report from Viceroy, which called the Vedanta group's structure "financially unsustainable" and "operationally compromised," warning that it poses a significant but overlooked risk to creditors.

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 g...