PSU consortium led by MAHAGENCO, NTPC to take over Sinnar Thermal Power for Rs 3,800 crore

The National Company Law Tribunal (NCLT), New Delhi Bench, has approved a resolution plan worth ₹3,800.14 crores for the insolvent Sinnar Thermal Power Limited (STPL). The successful bidder is a consortium of two public sector giants—Maharashtra State Power Generation Company Limited (MAHAGENCO) and NTPC Limited.

The plan, approved under the Insolvency and Bankruptcy Code (IBC), aims to revive the Nashik-based power plant and ensure maximum recovery for creditors. The corporate insolvency resolution process (CIRP) was initiated in September 2022 on an application filed by operational creditor Shapoorji Pallonji & Company Private Limited.

How the resolution pie is shared

The total resolution amount of ₹3,800.14 crores will be distributed among stakeholders as follows, in accordance with the plan and its addendums:

1. Insolvency resolution process (CIRPc Costs: ₹75 crores have been earmarked, payable on an actual basis. Any excess over this amount will be deducted from the sum payable to the assenting financial creditors.
2. Operational creditors (excluding workmen & employees):
   • They will receive the higher of two amounts:
     • (a) ₹2.5 crores PLUS any leftover amount from the ₹75 crore CIRP cost pool (if costs are lower); OR
     • (b) The amount they would have received in a liquidation scenario under Section 53 of the IBC.
   • Government and statutory dues (like customs) are covered under this head, with specific provisions for outstanding contributions like provident fund, which will be paid in full and in priority.
3. Workmen and employees: The plan states no admitted claims exist against them as of the cut-off date, hence no payout is proposed.
4. Financial creditors (Secured): This is the largest beneficiary group.
   • Assenting Financial Creditors (who voted for the plan) will receive the core payout of ₹3,720.14 crores, subject to certain adjustments. They are also entitled to future recoveries from:
     • Avoidance transactions (fraudulent/preferential dealings).
     • Litigation recoveries.
     • Any surplus cash from the corporate debtor.
   • Dissenting Financial Creditors (if any) will only receive their entitlement as per the liquidation value under Section 53 of the IBC, which will be paid from the resolution amount.
5. Contingency Provision: An amount of ₹2.5 crores (the “Other Amounts”) is set aside for a period of three years to meet any claims arising from the termination of existing Engineering, Procurement, and Construction (EPC) contracts.

Recovery Metrics

The resolution plan offers a significant improvement over a liquidation scenario:

• The Liquidation Value of STPL was assessed at ₹2,967 crores. The resolution amount represents a 128.07% realization over this value.
• Compared to the Fair Value of ₹4,523 crores, the recovery stands at 84.01%.
• Against the total admitted claims of approximately ₹16,735 crores, the plan provides a recovery of 22.70%.

Tribunal’s reasoning and background

The NCLT bench, comprising Member (Judicial) Shri Manni Sankariah Shanmuga Sundaram and Member (Technical) Shri Atul Chaturvedi, emphasized that its role is limited to ensuring the plan complies with legal requirements, not to scrutinize the commercial wisdom of the Committee of Creditors (CoC).

The CoC, comprising major lenders like Power Finance Corporation, REC Limited, and Bank of India, had voted with a 100% majority to approve the MAHAGENCO-NTPC plan in June 2025. The tribunal cited Supreme Court precedents, including K. Sashidhar v. Indian Overseas Bank and Essar Steel, affirming the primacy of creditors’ commercial decisions.

The resolution process saw competitive bidding from 15 potential applicants, including Adani Power, Jindal Power, and Vedanta. After a challenge process, the public sector consortium emerged victorious.

The road ahead

The plan implementation period is 90 days from the order date. A Monitoring Committee will be constituted to supervise the transition. The consortium plans to restart the plant’s first two units within nine months and achieve full capacity within three years, involving significant capital expenditure, regulatory approvals, and restoration work.

The order also clarifies that the resolution applicants must seek any required statutory waivers or concessions from appropriate authorities, as the NCLT cannot grant reliefs outside the IBC’s purview.

Also See: NCLT approves Rs 4,000-cr bid by Adani Power for Vidarbha Industries Power