Long liquidation battle of Punj Lloyd — failed going concern sale offset by piecemeal asset auctions

The liquidation saga of engineering major Punj Lloyd Limited, once a powerhouse in the EPC sector, continues to be characterized by a prolonged and complex asset sale process. The company’s journey under the Insolvency and Bankruptcy Code (IBC) has seen repeated failures to find a buyer for the entire entity as a ‘going concern,’ contrasting with a gradual, successful piecemeal auctioning of its individual assets.

The unsuccessful bid to sell a ‘Going Concern’
The company, which was ordered into liquidation by the National Company Law Tribunal (NCLT) in May 2022, was initially directed to be sold as a ‘going concern’ to preserve its business operations and employee base. However, this primary objective has largely failed to materialize across multiple attempts.

• The company’s first e-auction for the sale of the business as a whole, held in July 2023, failed to attract any bids.

• A subsequent second e-auction in August 2023, with a reserve price of ₹1,061 crore, also failed due to the perceived high reserve price and lack of interest.

• By the 4th round of e-auction (held in November 2023), the Liquidator still did not receive earnest money deposits for the sale of the company as a going concern.

• By mid-2025, the company had reportedly gone through at least 13 rounds of e-auction, with the reserve price for the going concern sale being reset to ₹308.00 crore for the 13th round scheduled in August 2025.

Successful Asset Sales
Despite the challenges in selling the entire company, the Liquidator has seen success in selling specific, segmented asset sets:

• Fourth Round (November 2023): The auction received a successful bid for Asset Set 2 under Category B, which involved the sale of the company’s investments, including equity, loans, advances, and other outstanding dues in Punj on a standalone basis.

• Sixth Round (March 2024): Successful bids were received for several key physical assets: Freehold Land, Building, and Plant & Machinery at Banmore, Madhya Pradesh. Freehold land at Vadodra, Gujarat. Leasehold interest in land and building at Banmore, Madhya Pradesh. Two residential flats in Jamnagar, Gujarat.

Conversely, the company’s Annual Report for FY 2018-19, which provides updates on the process, confirms that certain assets, such as Land at Sidhudurg District, Maharashtra, Land at Mehsana, Gujarat, and Plant & Machinery at the RSRP site, were listed as unsuccessful in earlier sale rounds. The liquidation process has also encountered legal hurdles, including reports of forgery of the company’s commercial registration and fraudulent sale of assets in Oman, which necessitated filing an FIR with the local police.

Corporate Insolvency Resolution Process (CIRP) overview

• Initiation: The CIRP was initiated against Punj Lloyd Limited on March 8, 2019, following a petition filed by ICICI Bank under Section 7 of the IBC. The company had defaulted on a payment of ₹854 crore.

• Admitted Debt: The company’s total admitted liability to its creditors was over ₹13,380 crore.

• Resolution Attempt Failure: A final resolution plan submitted by a consortium of Prudent ARC and Payard Investments failed to gain the necessary approval from the Committee of Creditors (CoC). The resolution plan was rejected by a significant voting percentage of 79.53%.

Liquidation process overview

• Liquidation Order: Upon the failure of the resolution plan, the Hon’ble National Company Law Tribunal (NCLT), Principal Bench, New Delhi, passed an order on May 27, 2022, directing the liquidation of Punj Lloyd Limited.

• Manner of Liquidation: Crucially, the NCLT directed the Liquidator to pursue the sale of the company as a ‘going concern’ initially, in light of its active EPC projects and approximately 3,000 employees.

• Liquidator: Mr. Ashwini Mehra was appointed as the Liquidator.

• Process Duration: The liquidation process has received multiple extensions from the NCLT to allow for the continued sale attempts. The process was ordered to be extended until at least September 11, 2025.

• Asset Sale Strategy: Following the failure of bids for the company as a whole, the process shifted toward the segment-wise sale of assets to maximize recovery for creditors.

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