Adani Enterprises and Vedanta in the Spotlight: The Race to Acquire Jaiprakash Associates

Shares of Adani Enterprises and Vedanta are expected to be in the spotlight on Monday, November 10, as Adani Enterprises Ltd is likely to emerge as the highest bidder to acquire Jaiprakash Associates Ltd (JAL) through the insolvency process. According to a PTI report, Adani Enterprises' offer to pay the acquisition amount in two years has been found better than Vedanta's bid to make payments in five years.

In early September, mining conglomerate Vedanta Group had initially emerged as the highest bidder, with an offer of ₹12,505 crore as net present value (NPV), in an auction carried out by lenders to find suitors for JAL, whose interests span real estate, cement, power, hotels, and roads. Dalmia Cement (Bharat) Ltd, Jindal Power Ltd, and PNC Infratech Ltd did not bid in the auction process.

Later, the lenders held negotiations with these five players to enhance the bid value and maximize realizations. On October 14, these five bidders submitted fresh, signed resolution plans in sealed envelopes. According to the PTI report, the committee of creditors (CoC) of JAL met last week to deliberate on these comprehensive resolution plans and assess their feasibility and viability.

The CoC evaluated the resolution plans on the basis of the evaluation matrix and then scored the resolution plan of Adani Enterprises Ltd as the highest, followed by Dalmia Cement (Bharat) and then Vedanta Ltd, PTI reported, quoting sources. Now, the resolution plan could be put to a vote by the CoC in the next two weeks, sources said.

It is understood that the payments in Dalmia's plans are contingent upon the Supreme Court's judgment on the pending matter between JAL and the development authority YEIDA. Adani Group is offering the payment to lenders within two years, while Vedanta is offering back-ended payments over the next five years.

Last month, the erstwhile promoters of JAL also submitted their offer to settle with the lenders under 12A, but they did not cite any clear source of funds, PTI reported. PTI sources added that these offers typically aim to stall the resolution process. Previously, the promoters voiced objections to the process and attempted to secure a stay, but the courts denied their requests.

Based on the overall evaluation of the plans and the treatment of all stakeholders, it is now expected that the Committee of Creditors (CoC) may vote in favor of Adani Enterprises Ltd for the resolution and turnaround of JAL, according to the report.

About Jaiprakash Associates (JAL)

JAL, which has business interests spanning real estate, cement manufacturing, hospitality, and engineering & construction, was admitted into the Corporate Insolvency Resolution Process (CIRP) through the National Company Law Tribunal, Allahabad Bench, order dated June 3, 2024. The JAL was taken to insolvency proceedings after the conglomerate defaulted on payment of loans. Financial creditors' claim of around ₹60,000 crore has been admitted by the resolution professional. More than a thousand homebuyers are stuck in various projects of JAL.

The National Asset Reconstruction Company Ltd (NARCL) leads the list of claimants after acquiring stressed JAL loans from a consortium of lenders headed by the State Bank of India (SBI). In April this year, 25 companies showed interest in acquiring JAL. However, in June, JAL announced that it had received five bids, along with earnest money, for the acquisition of the company through the insolvency process. Adani Enterprises, Dalmia Cement, Vedanta Group, Jindal Power, and PNC Infratech had submitted bids to acquire JAL.

JAL has major real estate projects like Jaypee Greens in Greater Noida, a part of Jaypee Greens Wishtown in Noida (both on the outskirts of the national capital), and the Jaypee International Sports City, strategically located near the upcoming Jewar International Airport. It also has three commercial/industrial office spaces in Delhi-NCR, while its hotel division has five properties in Delhi-NCR, Mussoorie, and Agra. JAL has four cement plants in Madhya Pradesh and Uttar Pradesh and a few leased limestone mines in Madhya Pradesh. The cement plants, however, are non-operational.

It also has investments in subsidiaries, including Jaiprakash Power Ventures Ltd, Yamuna Motorway Tolling Ltd, Jaypee Infrastructure Development Ltd, and several other companies. The financial stress and insolvency impacted JAL's businesses, including cement manufacturing units and EPC projects of national importance, such as the Pakal Dul Dam project in Jammu & Kashmir and the Srisailam Canal project in Andhra Pradesh.