Shares of Vedanta slipped on Monday, September 8, after the mining and natural resources company, in its winning proposal for debt-ridden Jaiprakash Associates (JAL), committed to an upfront payment of ₹4,000 crore, with the balance amount to be cleared over the next five to six years.
Vedanta outbid Adani Group in the auction process with an offer carrying a net present value (NPV) of ₹12,505 crore. The auction was held by JAL’s lenders as part of efforts to identify a suitable buyer for the company, which has businesses spread across cement, power, real estate, hospitality and infrastructure.
Jaiprakash Associates is currently undergoing corporate insolvency resolution proceedings (CIRP) under the Insolvency and Bankruptcy Code. The Resolution Professional had invited resolution plans on June 24, followed by a challenge process involving five bidders including Vedanta, Adani, Dalmia, Jindal Power and PNC Infratech. At the end of the process, Vedanta was selected as the H1 bidder with the highest NPV value.
Although Vedanta has been identified as the preferred bidder, the Committee of Creditors (CoC) has not yet concluded the voting process. The resolution plan is expected to take between four to eight weeks for approval, with implementation likely requiring another three to four months.
According to JAL’s stock exchange filing, the company had an unpaid outstanding liability of ₹55,371.21 crore as of August 15.
In such insolvency auctions, the value of bids is assessed on an NPV basis since payments are scheduled over several years. The NPV method evaluates the present value of future cash flows compared to the current cost, incorporating the concept of the time value of money. Vedanta’s ₹12,505 crore offer was determined using this standard approach.