JSW Steel evaluating legal options for troubled BPSL assets

JSW Steel implemented the resolution plan for Bhushan Steel and Power Ltd “in full compliance” and the company is now evaluating all options to reach a legal remedy, including review of the Supreme Court order. On May 2, the Supreme Court rejected the resolution plan submitted by JSW Steel, holding it illegal and in violation of the Insolvency and Bankruptcy Code (IBC).

A bench comprising Justice Bela M Trivedi and Justice Satish Chandra Sharma criticised the conduct of all key stakeholders in the resolution process — the resolution professional, the committee of creditors (CoC) and the National Company Law Tribunal (NCLT) — for enabling what it termed a “flagrant violation” of the IBC, and ordered the liquidation of BSPL under the IBC.

In an exchange filing, JSW Steel said it is in consultation with its legal advisors and is evaluating all options to finalise the legal remedies, including review of the Supreme Court judgement dated May 2.

Pending the outcome of such actions, no adjustments have been made the company believes there is no adverse material impact on consolidated financial results as on for FY25.

JSW Steel said the apex court has directed the refund of the amounts paid to the financial creditors and operational creditors.

During an analyst call, JSW Steel Joint Managing Director & CEO Jayant Acharya said, “We implemented the resolution plan in full compliance. The production and sales continue from BPSL as on date,” he said, adding that there will not be any further investment in BPSL. The company is expecting an early resolution of the issue. The company also didn’t avail of any tax exemption from BPSL operations. He said he will not comment beyond this as the matter is sub judice.

The court has also directed initiating the liquidation proceedings for BPSL by the NCLT under IBC.

The company has carried out an assessment of control as per Ind AS 110 consolidated financial statements and based on legal opinion obtained has concluded that it has control over BPSL as at the date of balance sheet and has continued with the consolidation of BPSL financial statements with the company.

JSW Steel acquired BPSL in September 2019 for a little less than Rs 20,000 crore after the National Company Law Tribunal (NCLT) approved its resolution plan. The acquisition was completed in March 2021.

JSW Steel on Friday reported a 13.54 per cent rise in consolidated net profit to Rs 1,501 crore in the March 2025 quarter.

As per JSW Steel, BPSL has registered crude steel production of 0.98 million tonnes and sales volume of 0.94 million tonnes. Revenue from operations and operating EBITDA for the quarter stood at Rs 5,635 crore and Rs 570 crore, respectively.

The EBITDA increased 5 per cent quarter-on-quarter, mainly due to higher sales volume and lower coking coal cost. BPSL reported a profit after tax of Rs 42 crore for the March quarter.