Jaiprakash Associates: Vedanta's unrelated biz foray negative for minority investors, says Nuvama
Vedanta has emerged as the highest bidder to acquire Jaiprakash Associates’ assets under NCLT by agreeing to pay Rs 17,000 crore.
- Sep 8, 2025,
- Updated Sep 8, 2025 8:16 AM IST
Nuvama in a fresh note on Vedanta Ltd said the entering into an unrelated business by acquiring Jaiprakash Associates (JP Associates) assets would hurt stock valuations. For now, the domestic brokerage retained 'Buy', as it awaits finalisation of resolution plan to account for it in earnings estimates.
Vedanta has emerged as the highest bidder to acquire Jaiprakash Associates’ assets under NCLT by agreeing to pay Rs 17,000 crore. The deal is not yet final as the committee of creditors is likely to take around two months to finalise the resolution plan.
"Assuming it goes in Vedanta's favour, NCLT approval is needed, which could take 8–10 more months before upfront amount of Rs 4,000 crore needs to be paid. We believe Vedanta's focus will stay on core businesses (power) and it is likely to monetise other assets in due course," Nuvama said.
Getting into unrelated businesses at this point of time when priority should be deleveraging is a cause of concern, Nuvama said.
It called the event negative for minority shareholders even if the assets prove to be lucrative in future in case they get monetised.
"In the demerged entity, Vedanta will house this asset under Vedanta Ltd only where funding the entire Rs 17,000 crore will be difficult. However, we believe that the company can monetise some of the assets quickly, which could aid the balance sheet in not getting bloated. Despite this, culmination of the transaction is likely to restrict any re-rating of the stock amid improved fundamentals of existing operation.
Jaiprakash Associates' asset portfolio mainly comprises 4,000 acres of land at Delhi-NCR, 2,200MW thermal power (under Jaiprakash Power in which JAL has a 24 per cent stake), 10mtpa cement plant, 0.72mtpa urea plant, five hotels and EPC businesses.
"We understand Vedanta is likely to focus on power plant (synergy with existing business) while rest can be monetised in due course. Though asset value is likely to exceed Rs 17,000 crore, it needs to be developed before monetising, which may take 1–2 more years post acquisition," Nuvama said.
Also, Nuvama feels the bid is unconditional.
"Hence, if any liability (ongoing litigation with Yamuna Expressway Industrial Development Authority on past unpaid dues) arises, it will be borne by Vedanta. We believe Vedanta will be able to fund the acquisition, but are unconvinced by rationale to acquire the group of asset," Nuvama said.
Nuvama in a fresh note on Vedanta Ltd said the entering into an unrelated business by acquiring Jaiprakash Associates (JP Associates) assets would hurt stock valuations. For now, the domestic brokerage retained 'Buy', as it awaits finalisation of resolution plan to account for it in earnings estimates.
Vedanta has emerged as the highest bidder to acquire Jaiprakash Associates’ assets under NCLT by agreeing to pay Rs 17,000 crore. The deal is not yet final as the committee of creditors is likely to take around two months to finalise the resolution plan.
"Assuming it goes in Vedanta's favour, NCLT approval is needed, which could take 8–10 more months before upfront amount of Rs 4,000 crore needs to be paid. We believe Vedanta's focus will stay on core businesses (power) and it is likely to monetise other assets in due course," Nuvama said.
Getting into unrelated businesses at this point of time when priority should be deleveraging is a cause of concern, Nuvama said.
It called the event negative for minority shareholders even if the assets prove to be lucrative in future in case they get monetised.
"In the demerged entity, Vedanta will house this asset under Vedanta Ltd only where funding the entire Rs 17,000 crore will be difficult. However, we believe that the company can monetise some of the assets quickly, which could aid the balance sheet in not getting bloated. Despite this, culmination of the transaction is likely to restrict any re-rating of the stock amid improved fundamentals of existing operation.
Jaiprakash Associates' asset portfolio mainly comprises 4,000 acres of land at Delhi-NCR, 2,200MW thermal power (under Jaiprakash Power in which JAL has a 24 per cent stake), 10mtpa cement plant, 0.72mtpa urea plant, five hotels and EPC businesses.
"We understand Vedanta is likely to focus on power plant (synergy with existing business) while rest can be monetised in due course. Though asset value is likely to exceed Rs 17,000 crore, it needs to be developed before monetising, which may take 1–2 more years post acquisition," Nuvama said.
Also, Nuvama feels the bid is unconditional.
"Hence, if any liability (ongoing litigation with Yamuna Expressway Industrial Development Authority on past unpaid dues) arises, it will be borne by Vedanta. We believe Vedanta will be able to fund the acquisition, but are unconvinced by rationale to acquire the group of asset," Nuvama said.