Adani wins creditors’ nod to take over Jaiprakash Associates

Gautam Adani-led Adani Enterprises has edged out Vedanta in the race to take over Jaiprakash Associates Ltd (JAL), despite Vedanta placing the highest overall bid in an electronic auction, according to market sources.

JAL, the flagship of the Jaypee Group, has interests across cement, power, engineering, hospitality, real estate and sports infrastructure.

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Creditors of Jaiprakash Associates Ltd (JAL) unanimously voted in favour of Gautam Adani-led Adani Enterprises’ resolution plan, despite Vedanta’s being the highest technically, due to which the creditors’ decision to favour Adani is likely to be challenged legally.

The National Asset Reconstruction Company is JAL’s largest creditor. Jaiprakash Associates (JAL), which owes its creditors (lenders) Rs 55,000 crore, was admitted into insolvency proceedings in June 2024 in a process being overseen by Deloitte-backed resolution professional Bhuvan Madan.

Final voting on the bids concluded at 9 pm on Tuesday, and Vedanta had offered Rs 17,000 crore in the e-auction. However, JAL’s creditors opted for Adani Enterprises because it proposed higher upfront payments.

The net present value of Adani’s bid was around Rs 500 crore, lower than Vedanta’s bid of Rs 17,000 crore. Yet, a score sheet prepared by the committee of JAL’s creditors last week had already given Adani Enterprises the highest score out of 100, though some creditors challenged the scoring mechanism, according to market sources.

Though there is a possibility of creditors’ decision to favour Adani being challenged legally, courts have generally upheld the commercial wisdom of creditors in stressed asset resolutions.

Adani Enterprises, Vedanta, Dalmia Bharat, Naveen Jindal’s Jindal Power and PNC Infratech had submitted plans initially. Dalmia Bharat emerged as the highest bidder in the first round, but its offer was considered conditional, and it did not participate in the electronic auction held later.

It was reported earlier that JAL’s promoters, led by Manoj Gaur, had proposed an Rs 18,000-crore settlement to take the company out of insolvency, but his creditors felt that Gaur had not provided sufficient proof of financial backing for his offer.