‘Web of assets’: Vedanta’s Jaiprakash Associates bid a cart before horse: ICICISec
Jaiprakash Associates holds a 24 per cent stake in Jaiprakash Power Ventures, which operates around 2,200 MW of hydrothermal power capacity.
- Sep 8, 2025,
- Updated Sep 8, 2025 4:05 PM IST
ICICI Securities has described Jaiprakash Associates as a "complex web of assets," highlighting challenges surrounding Vedanta's acquisition bid. Vedanta's Rs 17,000 crore offer, spread over five years, aims to acquire these assets. However, concerns about the strategic alignment of Jaiprakash's diverse businesses with Vedanta's current operations persist. ICICI Securities has maintained a 'Buy' rating on Vedanta, suggesting a target price of Rs 530.
Founded in November 1995, Jaiprakash Associates is the flagship company of the Jaypee Group. It operates in various sectors, including cement, real estate, hospitality, and engineering, with investments in power and fertilisers. In FY24, the fertiliser sector contributed 45 per cent to its revenue, followed by construction at 35 per cent, and real estate at 15 per cent, which has faced delays and legal hurdles. This diverse portfolio underscores the complexity of the acquisition.
Jaiprakash Associates holds a 24 per cent stake in Jaiprakash Power Ventures, which operates around 2,200 MW of hydrothermal power capacity, reporting revenues of Rs 546.20 crore and a profit after tax of Rs 81.10 crore in FY25. Additionally, it manages about 10 million tonnes of cement capacity, which is partially operational. This complex business structure and ongoing losses pose uncertainties to the acquisition's success.
ICICI Securities has noted the staggered payment as a favourable feature, potentially aiding Vedanta in managing its debt. This structure could lower the net present value of the acquisition to below Rs 17,000 crore. Initial payments are estimated at Rs 3,700–3,800 crore, with subsequent payments of Rs 2,700–3,300 crore annually over five years. However, the path to turning around Jaiprakash's businesses remains unclear. The legal and operational challenges further complicate the acquisition landscape.
Vedanta must secure several statutory approvals, including from the Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT), anticipated to take 3-6 months. After approval, Vedanta is expected to make an upfront payment of Rs 3,700–3,800 crore, with the balance spread over five years. This timeline adds another layer of complexity to the acquisition process.
ICICI Securities called Jaiprakash Associates a complex web of assets. Meanwhile, Nuvama today said Vedanta's entry 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.
ICICI Securities has described Jaiprakash Associates as a "complex web of assets," highlighting challenges surrounding Vedanta's acquisition bid. Vedanta's Rs 17,000 crore offer, spread over five years, aims to acquire these assets. However, concerns about the strategic alignment of Jaiprakash's diverse businesses with Vedanta's current operations persist. ICICI Securities has maintained a 'Buy' rating on Vedanta, suggesting a target price of Rs 530.
Founded in November 1995, Jaiprakash Associates is the flagship company of the Jaypee Group. It operates in various sectors, including cement, real estate, hospitality, and engineering, with investments in power and fertilisers. In FY24, the fertiliser sector contributed 45 per cent to its revenue, followed by construction at 35 per cent, and real estate at 15 per cent, which has faced delays and legal hurdles. This diverse portfolio underscores the complexity of the acquisition.
Jaiprakash Associates holds a 24 per cent stake in Jaiprakash Power Ventures, which operates around 2,200 MW of hydrothermal power capacity, reporting revenues of Rs 546.20 crore and a profit after tax of Rs 81.10 crore in FY25. Additionally, it manages about 10 million tonnes of cement capacity, which is partially operational. This complex business structure and ongoing losses pose uncertainties to the acquisition's success.
ICICI Securities has noted the staggered payment as a favourable feature, potentially aiding Vedanta in managing its debt. This structure could lower the net present value of the acquisition to below Rs 17,000 crore. Initial payments are estimated at Rs 3,700–3,800 crore, with subsequent payments of Rs 2,700–3,300 crore annually over five years. However, the path to turning around Jaiprakash's businesses remains unclear. The legal and operational challenges further complicate the acquisition landscape.
Vedanta must secure several statutory approvals, including from the Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT), anticipated to take 3-6 months. After approval, Vedanta is expected to make an upfront payment of Rs 3,700–3,800 crore, with the balance spread over five years. This timeline adds another layer of complexity to the acquisition process.
ICICI Securities called Jaiprakash Associates a complex web of assets. Meanwhile, Nuvama today said Vedanta's entry 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.