Shares of JSW Steel Ltd fell sharply by over 5.6% to ₹971.40 in Thursday’s trading session after the Supreme Court of India rejected its nearly ₹20,000 crore resolution plan for Bhushan Power and Steel Ltd (BPSL). The apex court also directed the liquidation of the company, declaring the resolution plan as illegal and improperly accepted by the Committee of Creditors (CoC).
What triggered the fall?
The judgment comes nearly four years after JSW Steel’s bid was cleared by both the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). The deal, however, was contested by the Enforcement Directorate (ED), which argued that JSW was a “related party” to BPSL and thus not entitled to clean slate immunity under Section 32A of the Insolvency and Bankruptcy Code (IBC).
Despite support from multiple government bodies—including the Ministry of Corporate Affairs, the Serious Fraud Investigation Office (SFIO), the CoC, and the resolution professional—the Supreme Court sided with the ED’s objection and rejected the takeover plan.
Impact and Outlook:
The Supreme Court’s decision is a major blow to JSW Steel and its investors, who had long awaited closure on the deal. It also affects BPSL’s lenders who were counting on recoveries from the resolution.
Legal experts believe the ruling sets a strong precedent in India’s insolvency law landscape and raises new challenges for future resolution applicants, especially regarding Section 32A protections.
The liquidation process for BPSL is now expected to begin shortly, ending one of the most contentious insolvency battles under the IBC.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
