JSW Steel: SC upholds resolution plan for BPSL; what experts say

JSW Steel Ltd was in spotlight on Friday after the Supreme Court affirmed the resolution plan for Bhushan Power & Steel (BPSL), dismissing objections raised by the company’s former promoters and some creditors. A bench led by Chief Justice of India BR Gavai, along with Justices SC Sharma and K Vinod Chandran, re-heard the appeals after recalling an earlier judgment by a two-judge bench.

Shiju PV, Managing Partner, IndiaLaw LLP said the Supreme Court’s decision brings much-needed certainty to India’s insolvency regime. By reversing its earlier liquidation order, the Court has reinforced the principle that the commercial wisdom of the Committee of Creditors must be respected and that delays or procedural hurdles should not derail a viable resolution, he said.

"This judgment will restore investor confidence, prevent erosion of value in large stressed assets, and reaffirm India’s commitment to timely and effective insolvency resolution. It also sends a strong signal that once a plan is substantially implemented, it must be given finality unless there is some flagrant legal violation — a message critical for attracting serious resolution applicants in future IBC cases  Shiju PV, Managing Partner, IndiaLaw LLP,"
he said.

Sukrit Kapoor, Partner, King Stubb & Kasiva, Advocates and Attorneys said it is a welcome move as it reinstates investor confidence in the Indian stressed assets market and also the judiciary. 

"Once the amendments that are pending before Parliament are introduced to the IBC, India will be put on the track to compete with other preferred jurisdictions for insolvencies," Kapoor said.

The stock rose 1.56 per cent to hit a high of Rs 1,167. The scrip was later tarding flat at Rs 1,146.85.

There were earlier concerns that JSW Steel would be forced to write off its Rs 19,700 crore investment in Bhushan Power & Steel Ltd (BPSL), after the Supreme Court declared the 2021 acquisition illegal and ordered the company into liquidation. 

JSW Steel had acquired BPSL as part of its aggressive expansion plan and invested Rs 3,500–4,500 crore post-acquisition to expand capacity from 2.75 MT to 4.5 MT. Plans were in place to raise it to 10 MT by 2030–31.

BPSL accounts for 10–11 per cent of JSW’s expected FY25–27 Ebitda.