Jaiprakash Associates bid: Vedanta shares fall as firm offers ₹4,000 crore upfront payment; check other key details

Shares of Vedanta are likely slipped on Monday, September 8, after the mining conglomerate, in its winning bid for the debt-laden firm Jaiprakash Associates (JAL), offered an upfront payment of ₹4,000 crore, with the remaining amount to be paid over the next five–six years.

JAL is undergoing CIRP under the IBC process, and the Resolution Professional invited Resolution Plans on June 24. As a part of the same process, a challenge process was conducted among the five bidders (Vedanta, Adani, Dalmia, Jindal Power and PNC Infratech), wherein Vedanta emerged as the H1 bidder at the NPV value of ₹12,505 crore.

Though Vedanta has been identified as H1, the CoC is yet to conclude the process and vote on the successful resolution plan, which is estimated to take another four to eight weeks. After this, implementation of the plan will take another three to four months.

JAL has an unpaid outstanding of ₹55,371.21 crore as of August 15, according to a stock exchange filing of the company.

Vedanta emerged as the H1 bidder by offering a payment of ₹12,505 crore on a Net Present Value (NPV) basis. In auction processes like this, where the payment terms are staggered over the next few years, the offered amount is measured using the NPV method, as that is a capital budgeting technique that evaluates the profitability of a project or investment by comparing the present value of future cash inflows to the current cost of the investment, also known as 'time value of money' in accounting terms.

JAL, which has five key verticals (power, real estate, cement, hotels and EPC), complements Vedanta's businesses such as power (already present and has a sizable portfolio including Talwandi Sabo and Meenakshi Energy).

At 9:55 AM, on Monday, shares of Vedanta were seen at ₹438.25 apiece on the National Stock Exchange, falling 1.63%.