Vedanta has challenged the Committee of Creditors (CoC)' decision to back Adani Group's bid to acquire Jaypee Associates Ltd (JAL) in the Supreme Court. Despite a higher headline bid by Vedanta, Adani offering a higher upfront cash and a faster payout timeline worked in its favour, experts have pointed out.
The case delves into India's insolvency framework and revives the debate between headline value and realisable value.
Sanjay Asher, senior partner at Crawford Bayley, said that the commercial wisdom of the CoC will always prevail and that they can best evaluate which bid maximises the value. Courts have mostly refrained from interfering in such cases unless a mala fide intent is evident, he added.
Headline numbers can be misleading, emphasised Abizer Diwanji, founder of Neostrat Advisors LLP, stressing that net present values and the probability of recovery matter the most. He pointed out that there is credit risk associated with deferred payments and that makes execution capability a key differentiator.
JAL's assets fit well within Adani ecosystem that includes cement, power, logistics, and land bank, noted market veteran Deven Choksey, stressing that this strengthens Adani's case before the lenders even if it involves lower upfront figures.
A former banker also pointed out that for a lender, the evaluation goes beyond price discovery. The net present value and the bidder's ability to execute are critical, stressed consultant Naresh Malhotra.
Legal experts also weighed in, noting that speed is central to the resolution process. An intervention by the Supreme Court is unlikely unless there is a glaring legal error, said Swapnil Kothari, a senior lawyer, adding that a faster resolution can outweigh a higher but delayed payout. He also argued that overreach by stakeholders can dilute the effectiveness of the insolvency code.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)
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