Vedanta share price extends rally as Supreme Court asks NCLAT to hear plea in Jaiprakash Associates insolvency case
The top court asked the NCLAT to decide the plea and the counter petition expeditiously by hearing them on an “out of turn basis” on the dispute over the acquisition of JAL by the Adani group.
Vedanta share price rallied 3% on Wednesday, extending gains from for the sixth straight session, ahead of the National Company Law Appellate Tribunal (NCLAT) hearing on the Jaiprakash Associates Limited (JAL) insolvency case later this week. Vedanta shares gained as much as 3.99% to ₹735 apiece on the BSE.
The Delhi bench of the NCLAT will hear Vedanta’s appeal challenging the approval of the resolution plan for JAL on April 10.
The Supreme Court on Monday had declined to stay the implementation of the Adani group’s ₹14,535-crore bid to acquire the debt-ridden JAL, but provided a safeguard by restraining the firm’s monitoring committee from taking any “major policy decisions” without prior nod of the NCLAT.
A bench of Chief Justice Surya Kant and Justice Joymalya Bagchi asked Anil Agarwal-led mining giant Vedanta, which is opposing the resolution plan, and Adani Enterprises to raise contentions and counterclaims before the NCLAT, which will start final hearing on the row on April 10.
The top court asked the NCLAT to decide the plea and the counter petition expeditiously by hearing them on an “out of turn basis” on the dispute over the acquisition of JAL by the Adani group.
The upcoming hearing is likely to be a definitive moment in the long-pending JAL insolvency resolution process. The outcome could have significant implications not only for the competing bidders, including Vedanta Limited, but also for creditors awaiting recovery and the IBC’s broader objective of time-bound resolution under India’s insolvency framework. A clear direction from the appellate tribunal may finally determine the path forward in this case.
Jaiprakash Associates Insolvency Case
Vedanta knocked at the Supreme Court's doors, maintaining that it had been formally notified as the highest bidder, both on substantive terms and on a net present value (NPV) basis. It further contended that its resolution plan, pegged at ₹17,926 crore, offers a significantly higher value than the ₹14,535 crore proposed by the other bidder.
The company also claim that its resolution plan would result in an additional recovery of about ₹3,400 crore for creditors.
Vedanta sought an expedited hearing, urging the tribunal to take up the matter at the earliest. It also submitted that the monitoring committee overseeing JAL’s affairs should not be disbanded at this stage. Explaining the need for an interim relief until the pending issues are adjudicated, Vedanta said that allowing the resolution plan to proceed without a stay could lead to complications.
Meanwhile, Adani Enterprises’ bid of ₹14,535 crore was approved by CoC in November last year.
Adani Enterprises had outbid Vedanta and Dalmia Bharat to win the bid for JAL. Adani got the maximum 89% votes from creditors, followed by Dalmia Cement (Bharat) and Vedanta Group.
Adani’s bid was preferred as it offered around ₹6,000 crore upfront and faster payments within two years, compared with Vedanta’s longer payment timeline of up to five years.
JPMorgan Upgrades Vedanta
In another update, global brokerage firm JPMorgan has upgraded its rating for Vedanta shares to ‘Overweight’ from ‘Neutral’, and raised the target to ₹850 from ₹680 earlier.
The upgrade is driven by higher LME aluminium prices and favourable foreign exchange movements, particularly the depreciation of the Indian rupee, which are likely to support profitability.
JPMorgan believes the US-Iran war in the Middle East has put us on the edge of a bullish supply-driven event horizon, and recent smelter outages will likely last for months even after shipping through the Strait of Hormuz eventually returns.
It expects commodity tailwinds to help ease recent debt concerns, and valuations have turned attractive with current stock prices for Vedanta, implying an LME aluminium price of $2,900 per tonne versus the spot price of $3,500 per tonne.
JPMorgan believes risk reward looks attractive at <4x FY27E EV/EBITDA. It forecasts 49% EBITDA growth in FY27 YoY, driven by higher Aluminium, Zinc and silver prices. It also expects leverage ratio to continue improving to <1x ND/EBITDA while the demerger or vertical integration projects appear to be progressing well now.
At 1:05 PM, Vedanta share price was trading 1.43% higher at ₹723.80 apiece on the BSE.
(With inputs from PTI)
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