JSW Steel Faces Major Setback as Supreme Court Rejects Acquisition Plan
In a significant development, JSW Steel experienced a sharp decline of over 7% in its share price on Friday. This drop came after reports emerged indicating that the Supreme Court of India has rejected the company’s resolution plan aimed at acquiring Bhushan Power and Steel Ltd (BPSL). The Court’s decision has led to the order for liquidation of the already financially troubled steelmaker, marking a tumultuous turn of events for JSW Steel.
Supreme Court’s Decision: Key Highlights
- The Supreme Court dismissed the resolution plan originally valued at ₹19,700 crore, which JSW Steel had submitted for BPSL.
- Instead of allowing the acquisition, the Court mandated that BPSL be liquidated, citing non-compliance with insolvency law timelines as a critical reason.
- Reports suggest that JSW Steel’s approach, which combined equity and optionally convertible debentures (OCDs), did not meet the required standards, as the entire transaction should have been executed solely through equity.
Exchange Seeks Clarification
Following the Supreme Court’s ruling, the Stock Exchange has requested a formal clarification from JSW Steel. This inquiry is in response to a report from Moneycontrol stating, “Setback for JSW Steel as SC directs liquidation of Bhushan Power and Steel.”
JSW Steel’s Response
In a statement, JSW Steel acknowledged the Supreme Court’s ruling, noting that the judgment was pronounced on May 2, 2025. The company revealed that it had not yet received the official documentation outlining the grounds for the rejection, which limits its ability to fully assess the implications of the Court’s decision. JSW Steel intends to consult with legal advisors before determining its next steps.
Background on the Acquisition Process
JSW Steel had initially emerged as the successful bidder in one of India’s largest insolvency proceedings, securing a 49% stake in BPSL in 2019 and completing the acquisition in 2021. This deal was expected to bolster JSW’s steel-making capacity by an additional 2.75 million tonnes per annum (mtpa) and open up further expansion opportunities. By October 1, 2021, JSW increased its stake in BPSL to 83.3%.
Implications for Investors
This recent development raises several questions for investors:
- How will JSW Steel’s strategy change following this setback?
- What impact will the liquidation of BPSL have on the steel market in India?
- What legal avenues might JSW Steel pursue moving forward?
As the situation evolves, stakeholders will be keenly observing how JSW Steel navigates this complex scenario and what steps it will take next. For more insights into market responses, check out our analysis on Indian Oil Shares and their projected growth potential.
