India’s Supreme Court on Friday rejected JSW Steel’s [1] resolution plan to acquire Bhushan Power and Steel, ordering the liquidation of the debt-ridden firm four years after the takeover was completed, according to lawyers involved in the case.
The court’s decision marks a significant setback for JSW Steel, India’s largest steelmaker by capacity, which had successfully bid 197 billion rupees ($2.35 billion) for Bhushan Power in 2021. The ruling follows concerns that the insolvency administrator and the lenders panel failed to discharge their duties in accordance with the law, one lawyer said, citing the Supreme Court’s verbal order.
While the full judgment is yet to be uploaded on the court’s website, news channel CNBC-TV18 reported that the Supreme Court deemed JSW Steel’s acquisition plan “illegal” and stated that Bhushan Power’s committee of creditors should not have approved it.
Following the announcement, JSW Steel’s shares tumbled nearly 7%, reflecting investor uncertainty over the implications of the ruling. The company responded by stating that it had yet to receive a formal copy of the order and would determine its next steps once the details were reviewed.
Bhushan Power, which owed over 470 billion rupees to creditors when it was admitted under India’s insolvency and bankruptcy code in 2017, has faced financial and legal troubles for years. In 2019, Punjab National Bank initiated criminal proceedings against the company’s former board of directors after uncovering 38 billion rupees in fraudulent transactions.
The Supreme Court’s decision to liquidate Bhushan Power raises questions about the future of its assets and the broader implications for India’s insolvency framework. Industry analysts suggest that the ruling could impact investor confidence in the country’s bankruptcy resolution process, particularly for large-scale industrial acquisitions.
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[1] Top Indian court scraps JSW Steel’s bid to acquire Bhushan Power, case lawyers say https://www.reuters.com/world/india/top-indian-court-scraps-jsw-steels-bid-acquire-bhushan-power-cnbc-tv18-reports-2025-05-02/