NEW DELHI: The Vedanta Group has raised concerns regarding the evaluation criteria used by the creditors of Jaiprakash Associates Ltd (JAL), which opted for a lower bid of ₹3,400 crore from Adani Enterprises for the financially troubled company.
During a session at the National Company Law Appellate Tribunal (NCLAT), Vedanta’s counsel remarked that the “valuation process has compromised the commercial judgment” exercised by the committee of creditors (CoC).
Senior advocate Abhijeet Sinha questioned whether the CoC’s evaluation matrix aimed at value maximization or served some other agenda.
Sinha argued that the evaluation matrix, along with the resolution plan request (RFRP) and process notes utilized by the CoC, should merely guide the process and cannot overshadow the primary objective of insolvency, which is maximizing value.
Claiming that Vedanta’s bid offered ₹3,400 crore more in gross value and ₹500 crore more in net present value (NPV) compared to Adani Group’s resolution plan, Sinha pointed out that the CoC did not deliberate on accepting a lower bid.
The CoC enlisted BTO India LLC to conduct feasibility studies for the received resolution plans, which provided scoring based on an evaluation matrix that does not represent a “sound exercise of commercial reasoning.” Sinha noted, “Adani scored 29.30 out of a maximum of 35, while we scored only 18.51,” emphasizing that this scoring played a crucial role in the decision but was also a factor that wasn’t adequately addressed by the CoC.
In terms of NPV, Vedanta achieved a perfect score of 35 out of 35; however, it lagged in equity and quasi-equity contributions for enhancing business operations within 180 days, scoring 2.56 compared to Adani’s 5.
The NCLAT is reviewing petitions filed by Vedanta Ltd, challenging the CoC’s choice of Adani Enterprises as the winning resolution applicant for JAL.
Vedanta’s legal representatives argued that the CoC, after initiating a challenge process due to insufficient bids, ultimately approved a plan it had previously deemed inadequate, thus undermining the fairness of the process.
They pointed to significant irregularities and a lack of transparency throughout the process, contending that the challenge mechanism was fundamentally unfair since bidders had to present both immediate and deferred payment elements while only being shown the highest NPV post each round.
Earlier, on March 24, the NCLAT did not impose any interim stay on Vedanta Group’s challenge regarding the NCLT’s approval of a ₹14,535-crore bid by Adani Group for JAL.
However, this plan remains subject to the resolution of appeals lodged by the Anil Agarwal-led Vedanta Group.
This interim decision from the NCLAT was further contested in the Supreme Court, which also denied a stay but instructed the monitoring committee to obtain the Tribunal’s approval prior to making any significant policy decisions.
On March 17, the Allahabad bench of the NCLT approved Adani Enterprises Ltd’s ₹14,535-crore bid to acquire JAL through the insolvency process.
Adani Enterprises topped Vedanta and Dalmia Bharat in the bidding, securing 89% of creditor votes, with Dalmia Cement and Vedanta Group trailing.
The CoC defended its decision, asserting that the process adhered to all regulations outlined in the Insolvency and Bankruptcy Code (IBC) and clarified that no bidder has an intrinsic right to win, even with the highest bid.
They reiterated that plans were evaluated on multiple criteria, including immediate cash contributions, project feasibility, and execution potential, rather than solely on headline value.
JAL, possessing premium assets and diversified interests in real estate, cement, hospitality, power, and engineering, was placed under corporate insolvency resolution process (CIRP) in June 2024 after defaulting on loans totaling ₹57,185 crore.
The company is involved in significant real estate developments such as Jaypee Greens in Greater Noida and the Jaypee International Sports City near Jewar International Airport. Additionally, it owns three commercial office spaces in Delhi-NCR and maintains its hotel division with properties in these regions as well as in Mussoorie and Agra.
JAL operates four cement plants in Madhya Pradesh and Uttar Pradesh, along with several leased limestone mines in Madhya Pradesh, and has investments in various subsidiaries, including Jaiprakash Power Ventures Ltd and Yamuna Expressway Tolling Ltd.
