Shares of Jaiprakash Power Ventures Ltd saw a significant increase of over 11% on Wednesday following the approval of Adani Enterprises’ resolution plan by creditors of Jaiprakash Associates Ltd (JAL), a bankrupt infrastructure group. JP Power’s stock, trading at Rs 22.37, surged more than 10% in early trading as investors reacted positively to the clarity provided on the future of JP Group’s distressed assets, with JAL holding nearly 24% stake in JP Power.
Adani Enterprises’ announcement of lenders voting in favor of its proposal to acquire JAL, which has creditors owed around Rs 57,000 crore, triggered the surge. The takeover bid, valued at approximately Rs 14,535 crore, consists of an initial payment of Rs 6,005 crore, with the remaining amount to be settled over 1.5-2 years, as per sources familiar with the situation.
Adani’s bid was chosen over Vedanta’s Rs 16,700-crore offer due to lenders preferring quicker and larger upfront recoveries. Vedanta’s proposal involved a five-year payment schedule, which creditors were not inclined to accept. The process is being managed by the National Asset Reconstruction Company Ltd (NARCL), which had previously acquired JAL’s loans from a consortium of lenders led by State Bank of India.
In addition to outbidding Vedanta, Adani’s offer also surpassed proposals from other contenders such as Dalmia Bharat, Jindal Power, and PNC Infratech. A late submission by JAL’s major shareholder, Manoj Gaur, was later retracted.
Upon the committee of creditors’ approval, the final resolution plan will be presented to the National Company Law Tribunal (NCLT) for review. Approval from the tribunal would signify one of the most significant insolvency resolutions within India’s bankruptcy framework. Despite recent volatility, JP Power’s shares have shown a notable increase from their 52-week low of Rs 12.35. The market has also reacted positively, anticipating improved long-term stability for group companies with the arrival of a financially stronger promoter.