On May 2, 2025, the Supreme Court of India struck down JSW Steel’s ₹19,700 crore acquisition of Bhushan Power & Steel Ltd (BPSL), ordering the company’s liquidation. The court deemed the resolution plan “illegal” and in violation of the Insolvency and Bankruptcy Code (IBC) due to two primary reasons:

1 Funding Structure: JSW Steel’s plan involved a combination of equity and optionally convertible debentures (OCDs), whereas the IBC mandates that such acquisitions be funded entirely through equity.

2 Timeline Violations: The implementation of the resolution plan exceeded the statutory timelines stipulated under the IBC.

Additionally, the court criticized the conduct of the Resolution Professional and the Committee of Creditors (CoC), stating that they failed to protect creditor interests and acted without commercial wisdom. The CoC had approved the plan despite these violations, and the National Company Law Tribunal (NCLT) had ratified it, which the Supreme Court subsequently quashed.

This decision has significant implications for the insolvency resolution process in India, raising concerns about the credibility and finality of such proceedings. JSW Steel, which currently holds an 83.3% stake in BPSL, may need to unwind the acquisition, potentially leading to financial and operational challenges.

In response to the ruling, JSW Steel has stated that it is reviewing the court’s judgment and will determine its next steps accordingly.

Sources