JSW Steel’s Takeover of Bhushan Power and Steel
The Supreme Court approval of JSW Steel’s takeover of Bhushan Power and Steel is a landmark decision in India’s insolvency resolution process. After years of litigation and multiple appeals, the apex court’s ruling allows JSW Steel to integrate Bhushan Power’s assets into its operations.
The acquisition not only increases JSW Steel’s production capacity but also highlights the success of the Insolvency and Bankruptcy Code (IBC) in resolving stressed assets.
Background of Bhushan Power and Steel
- Incorporated in 1970, Bhushan Power and Steel Ltd (BPSL) was among India’s major private steel producers.
- It had a capacity of 3.5 million tonnes per annum (MTPA).
- The company entered insolvency in 2017 due to unsustainable debt of over ₹47,000 crore.
- Multiple bidders including Tata Steel and Liberty House showed interest, but JSW Steel emerged as the successful bidder.
Financial Details of the Takeover
- Bid Value: ₹19,700 crore.
- Payout: Majority to secured lenders, with some haircut on outstanding loans.
- Equity Investment: JSW Steel to infuse funds for modernization and expansion of BPSL’s plants.
This acquisition makes it one of the largest resolutions under India’s IBC framework.
Supreme Court’s Role in the Case
- The acquisition was challenged due to allegations of fraud and money laundering by BPSL’s former promoters.
- The Enforcement Directorate (ED) had attached some assets.
- The Supreme Court ruling in 2025 upheld JSW Steel’s protection under Section 32A of the IBC, ensuring new management is shielded from past criminal liabilities.
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Impact on JSW Steel
- Capacity Addition: Bhushan Power’s 3.5 MTPA capacity increases JSW’s total to over 27 MTPA.
- Geographic Reach: Strengthens presence in eastern India (Odisha).
- Market Share: JSW consolidates position as India’s largest private steelmaker.
- Financial Outlook: Analysts expect EBITDA margins to improve by 12–14% in FY26 due to synergies.
Industry Impact
- Banking Sector Relief
- Lenders recover nearly 40% of their exposure.
- Sets precedent for faster resolution of future insolvency cases.
- Steel Sector Consolidation
- Larger players like JSW, Tata, and ArcelorMittal continue to dominate.
- Smaller stressed steel firms face pressure to consolidate or exit.
- Policy Perspective
- IBC strengthened as an effective tool for asset resolution.
- Encourages global investors in Indian distressed assets.
Global Context
India’s steel industry is currently the second-largest in the world, after China. With domestic demand expected to grow by 9–10% in FY26, acquisitions like this one help large companies prepare for surging consumption.
Internal link suggestion: Read our article: India Steel Consumption FY26: Growth to Reach 9-10% Says Steel Secretary
Expert Commentary
- “JSW Steel’s acquisition of BPSL is both a strategic and financial victory. It secures prime assets and strengthens the insolvency framework.” — CRISIL Metals Analyst
- “This resolution shows that India’s IBC can deliver results, provided legal clarity is maintained.” — Senior Economist, NITI Aayog
Risks and Challenges
- Integration Risks: Modernizing BPSL’s plants requires heavy investment.
- Debt Management: JSW Steel’s overall debt rises post-acquisition.
- Global Market Uncertainty: Steel prices remain volatile due to weak Chinese demand.
Frequently Asked Questions (FAQ)
Q1: What is the value of JSW Steel’s takeover of Bhushan Power and Steel?
The deal is valued at ₹19,700 crore.
Q2: Why was the takeover delayed?
Due to legal challenges and Enforcement Directorate investigations.
Q3: What did the Supreme Court decide?
It approved the acquisition and protected JSW from past criminal liabilities of BPSL.
Q4: How much capacity does JSW Steel gain?
3.5 MTPA, increasing its total capacity above 27 MTPA.
Q5: What is the industry significance of this case?
It reinforces the IBC as a successful resolution mechanism.
Conclusion
The Supreme Court approval of JSW Steel’s takeover of Bhushan Power and Steel closes one of India’s longest-running insolvency cases. For JSW, it is a strategic win that strengthens capacity, market reach, and financial performance. For India, it underscores the effectiveness of the IBC in resolving large corporate failures.
With domestic steel demand rising and global investors watching closely, this case could serve as a model for future resolutions in India’s steel and infrastructure sectors.