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In a dramatic turn of events in the corporate world, the Supreme Court of India has nullified JSW Steel’s ₹19,700 crore acquisition of Bhushan Power and Steel Ltd (BPSL), ordering the company’s liquidation and sending shockwaves through the global and Indian steel industry.
Background of the Case
JSW Steel, one of India’s largest steel producers, had acquired BPSL through the Insolvency and Bankruptcy Code (IBC) process in 2019. This ₹19,700 crore deal was finalized after approvals from both the NCLT and NCLAT, with JSW assuming ownership in 2021.
However, the Supreme Court, citing legal irregularities in the resolution process, declared the deal “illegal” and directed that BPSL be liquidated. This decision disrupts a major turnaround story and may redefine how India handles high-profile insolvency cases.
JSW Steel’s Immediate Losses
Production Impact: JSW Steel may face a 10-15% production hit, as BPSL contributes significantly to its output.
- Financial Loss: Analysts estimate a dent of ₹4,000–4,500 crore in EBITDA due to this setback.
- Stock Crash: JSW shares plummeted by over 5%, wiping off nearly ₹13,731 crore from its market capitalization on the Bombay Stock Exchange.
These developments signal turbulent times for JSW, which has been striving to expand capacity and maintain market leadership.
Lender Fallout: Banks on Alert
Major banks such as State Bank of India (SBI) and Punjab National Bank (PNB), which had already recovered part of their dues through the JSW acquisition, are now facing the possibility of fresh provisioning and financial setbacks.
This ruling could impact confidence in the IBC resolution process, prompting the banking sector to re-evaluate similar high-stake cases in the future.
Legal Shockwave: Experts Raise Concerns
Legal experts say this ruling creates a precedent-shattering moment. Never before has a Supreme Court reversed an acquisition already implemented under IBC.
There are concerns that:
- Finality in resolution processes is at risk.
- Buyers may hesitate to invest in stressed assets if such deals can be unraveled.
- India’s insolvency framework may lose international credibility unless safeguards are introduced.
JSW Steel’s Official Response
JSW Steel has stated that it is currently reviewing the court’s decision and has yet to receive the official copy of the ruling. Once the judgment is examined in detail, the company plans to explore all legal and operational remedies available.
Despite this legal blow, JSW maintains that it has complied with the IBC process as approved by the relevant insolvency authorities.
Conclusion
This development isn’t just a corporate setback—it’s a major headline in the latest world news and India news landscape. With billions at stake and the future of India’s insolvency system hanging in the balance, this is a story that will continue to evolve.
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