NARCL may acquire Jaiprakash Associates assets for Rs 12,000 crore

The National Asset Reconstruction Company Ltd (NARCL), a government-backed entity established to address non-performing assets in India’s banking sector, has made significant strides in its bid to acquire the distressed debt of Jaiprakash Associates Ltd (JAL). NARCL has emerged as the sole bidder for Jaiprakash Associates assets with its Rs 1200 crore bid.

In March 2024, NARCL initially proposed a bid of ₹10,000 crore to take over JAL’s outstanding debt, which amounts to approximately ₹54,000 crore. This offer was subsequently revised in November 2024 to ₹12,000 crore, following a comprehensive valuation exercise conducted by NARCL. The enhanced bid comprises an upfront cash payment of ₹1,800 crore (15% of the total offer) and the remaining 85% in security receipts guaranteed by the government, valid for five years—a distinctive feature of NARCL’s acquisition strategy.

JAL, a prominent infrastructure conglomerate, has been grappling with substantial financial challenges, leading to its inclusion among the major insolvency cases under the Insolvency and Bankruptcy Code (IBC) since its enactment in 2016.

The consortium of lenders to JAL is led by the State Bank of India (SBI), which has an exposure of ₹15,465 crore, and ICICI Bank, with claims amounting to ₹10,443 crore. Other significant creditors include IDBI Bank, Life Insurance Corporation (LIC), and Axis Bank. Despite the substantial debt, JAL possesses valuable assets, including cement plants with a capacity exceeding 9 million tonnes, real estate in the Yamuna Expressway Industrial Development Area, hotels in key locations, an engineering, procurement, and construction (EPC) business, power plants, a hospital in Noida, and the Buddh International Circuit.

To ensure transparency and maximize recovery, SBI invited counterbids through a Swiss challenge auction, requiring interested entities to offer at least ₹12,600 crore on a full cash basis. However, no competing bids were received by the extended deadline of January 14, 2025, rendering NARCL the sole contender for acquiring JAL’s debt. This outcome positions NARCL as the preferred bidder, and formal communications are underway to finalize the acquisition process.

Also See: Lenders reject one-time settlement proposal of Jaiprakash Associates promoters