Whalesbook
The Valuation Showdown
The battle to acquire debt-ridden Jaiprakash Associates Ltd (JAL) has moved to the National Company Law Appellate Tribunal (NCLAT). The dispute centers not just on bid amounts, but on the fairness of the evaluation process. Vedanta is challenging Adani Enterprises' winning bid, claiming its own offer was financially superior. However, JAL's Resolution Professional (RP) told the NCLAT that Vedanta was never officially named the highest bidder. The RP defended the Committee of Creditors' (CoC) use of a comprehensive evaluation framework, which balances financial bids with other important factors in insolvency cases.
Vedanta's Bid vs. CoC's Matrix
Vedanta claims its addendum bid offered about ₹3,400 crore more in gross value and ₹500 crore higher Net Present Value (NPV) than Adani's bid. Vedanta argues this shows the CoC did not maximize value, a key goal of the Insolvency and Bankruptcy Code (IBC). The RP, however, stated that an email on September 5, 2025, only reported the highest financial figure found (around ₹12,505.850 crore NAV) and was not an official declaration. Senior Advocate Abhishek Manu Singhvi, representing the RP, explained the CoC used a 100-point system, with 80 points for financial figures and 20 for qualitative aspects, a common practice in insolvency cases.
Questions Over Bid Revisions
Vedanta's situation is further complicated by its submission of a revised bid on November 8, 2025, a day after being told voting would proceed. The RP called this an "impermissible unilateral revision," arguing it breaks fairness rules and the equal opportunity for all applicants, undermining the process's finality. Vedanta's earlier challenge to the NCLT bench in Allahabad, which approved Adani's ₹14,535-crore bid, was dismissed. Subsequent attempts by Vedanta to get interim stays were also denied by the NCLAT and the Supreme Court.
Financials of Adani and Vedanta
Financial figures show Adani Group reported nearly ₹90,000 crore EBITDA in FY25, with Adani Enterprises earning ₹16,722 crore for the year ended March 31, 2025. Adani Group's Net Debt to EBITDA ratio was 2.6x. Vedanta Limited posted a profit of $1,617 million for FY25 and saw revenue rise 6% to $18.2 billion. For Q2 FY25, Vedanta reported INR 39,218 crores in revenue and INR 11,612 crores in EBITDA, with a Net Debt to EBITDA ratio of 1.37x. Analysts are generally positive on Vedanta, with many recommending 'Buy' and raising price targets. Some market watchers suggest Adani Enterprises is trending downwards, although Jefferies rates the stock 'Buy'. JAL's estimated liquidation value was about ₹15,799.53 crore. Adani's accepted bid was ₹14,535 crore, meaning creditors might have received more if JAL was liquidated, a point Vedanta highlights to support its claim of a better offer.
Insolvency Law and Future Precedents
This dispute challenges how the IBC works, especially regarding the Committee of Creditors' "commercial wisdom." While CoC decisions are usually final, Vedanta questions if this wisdom was used properly to maximize value. Past NCLAT rulings suggest that a completed challenge process doesn't automatically guarantee the highest bidder wins, and the CoC can still negotiate for better value. However, the RP argues that strict timelines and rules against changing bids after submission act as safeguards, which Vedanta's late bid allegedly broke. The extended legal fight creates uncertainty for JAL's assets and their potential recovery, possibly setting a precedent for handling similar bid disputes in India's growing distressed asset market.
Next Steps at the NCLAT
The NCLAT bench, chaired by Justice Ashok Bhushan, set the next hearing for Monday. Solicitor General Tushar Mehta, representing the banks, is expected to present arguments. The tribunal's decision could heavily influence how valuation methods are interpreted and procedural rules are applied in future insolvency cases, affecting companies in debt and potential bidders. The market will closely observe whether the NCLAT favors the CoC's detailed evaluation or Vedanta's focus on quantifiable, value-driven bids.