 "JAL's valuation may be hit after HC okays sports city land cancellation")
The valuation of Jaiprakash Associates’ assets has taken a hit after the Allahabad High Court recently upheld an order by a government agency to cancel 1,000 hectares (approximately 2,471 acres) of land allotted to the company for its sports city project near New Delhi years before it went bankrupt.
The cancellation by Yamuna Expressway Industrial Development Authority (YEIDA) was a setback for the real estate company, which this week drew expressions of interest from around 24 suitors, including Jindal Power, Adani, Suraksha, and Torrent Group. “We are reviewing the order, as it will directly impact the company’s valuation when financial bids are invited,” said the representative of a company that bid for Jaiprakash Associates Ltd (JAL).
JAL was admitted into the insolvency process on June 3. Total claims filed against it in insolvency proceedings amount to Rs 64,552 crore, according to the court order. Of that amount, claims worth Rs 51,512 crore were admitted by insolvency authorities.
JAL owns cement manufacturing units of 10 million tonnes annual capacity and power, road, fertiliser, and tunnel projects. The company employs 19,154 people and reported total assets of Rs 36,140 crore and revenue of Rs 6,568 crore as of March 2024, according to its website.
The insolvency professional will provide bidders access to data on JAL and final bids would be invited. The land was allotted in 2008 for mixed-use development, including sports infrastructure, residential, and commercial spaces. YEIDA cancelled the allotment after the company did not pay dues and failed to develop core sports facilities within deadline. Despite JAL’s argument for partial cancellation, the High Court on March 10 upheld full cancellation of the allotment.
A group of lenders comprising State Bank of India, ICICI Bank, IDBI Bank, Axis Bank, LIC, and others on March 11 transferred the unpaid loans and related financial assets of Jaiprakash Associates to National Asset Reconstruction Ltd This transfer includes securities, pledged shares, guarantees, and receivables that were used as collateral for loans.
The company's real estate holdings near the upcoming Jewar International Airport have drawn interest from potential buyers, offering access to a diverse population across different socio-economic groups. It also owns hotels in the NCR, benefiting from high occupancy rates due to their strategic locations in Delhi, near Basant Lok Complex and the airport. Beyond real estate, the company operates cement units with captive power plants, leveraging well-positioned limestone reserves in key cement-consumption states like Uttar Pradesh and Madhya Pradesh to drive efficiency and growth. Additionally, as a leader in the hydropower and construction sectors, the company provides a platform for expansion, supported by a proven history of profitability, the company said in a presentation to bidders.
Taking stock
The Allahabad High Court recently upheld an order to cancel 1K hectares of land allotted to Jaiprakash Associates
The land was for the real estate company’s sports city project near New Delhi
JAL was admitted into the insolvency process on June 3
Total claims filed against it in insolvency proceedings amount to Rs 64,552 cr
The insolvency professional will provide bidders access to data on JAL and final bids would be invited