Top steelmakers likely to rebid for distressed Bhushan Power & Steel assets

SC's order to liquidate Bhushan Power may prompt renewed interest from top steel companies, but investor concerns grow over reversals of long-settled IBC deals

steel, steel industry — The Supreme Court’s decision to unwind the years-old acquisition would cause unease among potential investors, say industry experts

3 min read Last Updated : May 04 2025 | 10:52 PM IST

The Supreme Court (SC) directive to liquidate Bhushan Power and Steel may rekindle interest among major domestic and international steelmakers looking to expand capacity, according to people familiar with the matter. The company, once a key acquisition under the Insolvency and Bankruptcy Code (IBC), had previously drawn bids from Tata Steel and the UK-based Liberty House, during the insolvency auction. It was eventually acquired by JSW Steel. Under JSW, Bhushan Power’s operations expanded from 2.75 million tonnes to 4.5 million tonnes.

“All major steel players with India operations, including global majors, may evaluate the asset,” said a banker, adding, “but it’s too early”.

Jindal Steel and Power, led by Naveen Jindal, is also likely to submit an offer, the people familiar with the matter said.

Sajjan Jindal-owned JSW Steel can also bid for Bhushan Power and Steel’s assets in the auction under the liquidation process, according to legal experts. “Under the liquidation process, the liquidator will seek offers for the assets, which can be by public auction or private sale, or as a going concern. The idea is to maximise the value of each of the assets so creditors can be paid off. There doesn’t appear to be any bar on JSW Steel taking part, unless the SC has made some observations,” said Rahul Dwarkadas, cofounder and senior partner, Veritas Legal. Also Read: How Bhushan Power & Steel entered the 'dirty dozen' list of defaulters

At the time of the IBC auction in March 2021, JSW Steel had paid ₹19,700 crore of Bhushan Power’s total debt of ₹47, 200 crore to creditors.

The renewed auction may take time and is unlikely to happen without twists and turns. The SC decision to unwind the years-old acquisition would cause unease among potential investors, according to industry experts. “This ruling raises fundamental concerns,” said Ketan Dalal, founder of advisory firm Katalyst Advisors. “When a major transaction is overturned after several years, it creates uncertainty — particularly regarding employees, creditors, and downstream investors who acted based on the validity of the acquisition.”

The case is likely to set a precedent for India’s insolvency resolution framework, potentially altering investor confidence in long-settled deals, he said. “The potential bidders also want clarity and no uncertainty with regard to litigation risk.” According to Dalal, the liquidation process itself is not very easy and each asset has to be sold separately.

The judgment may also have the unintended consequence of instilling a sense of caution among lenders and bidders under the IBC. A review petition by JSW Steel is also expected, potentially delaying the auction further.

The IBC process has had a mixed record in reviving bankrupt companies. Intended to create a win-win, delays have been a major issue. Some apprehend that the latest developments may slow things down further.