BIG Setback For JSW Steel! SC Directs Liquidation of Bhushan Power And Steel, Stock Down 6%

In a major setback for JSW Steel, the Supreme Court, on Friday, rejected its resolution plan for Bhushan Power and Steel Limited. The apex court also directed the liquidation of Bhushan Power and said that the resolution plan was illegal and should not have been approved in first hand.

The company scrip plummeted after the development. JSW Steel share price was trading 6.33% lower at Rs 963.25 per share on BSE at 12:20 pm.

SC's Strong Stance on JSW Steel Over Bhushan Power and Steel Resolution Plan

The SC bench, comprising Justice Bela M Trivedi and Justice Satish Chandra Sharma, ruled that the resolution plan of JSW was illegal and violated certain provisions of the Insolvency and Bankruptcy Code (IBC).

JSW Steel Stock Under Selling Pressure

JSW Steel's stock are witnessing a massive selling pressure after SC judgement on its resolution plan for Bhushan Power and Steel Limited. According to BSE, nearly 52,665 JSW Steel stocks were sold by 12 pm on the stock exchange against the purchase of merely 15,265 stocks of the company.

JSW Steel stock dipped to an intraday low mark of Rs 961.9 per share on BSE on Friday. Its market capitalisation stood at Rs 2,35,753.99 crore.

SC Action on JSW Steel: Why Did SC Reject Resolution Plan?

The apex court mentioned two major reasons for citing JSW Steel's resolution plan as illegal. The first reason was to conclude the takeover of the company by following the wrong process. According to a CNBC TV18 report, JSW Steel completed the takeover with a mix of equity and optionally convertible debentures. However, SC had highlighted that the process should have been completed only via equity.

Secondly, the resolution plan was not completed within the deadline, which garnered scrutiny. Now, JSW Steel is required to file a review petition in the case. The resolution plan is likely to get approval only if the company agrees to complete the takeover via equity and not issue convertible debenture, reported CNBC TV18 citing SC lawyer HP Ranina.

The company had acquired nearly 49% stake in Bhushan Power and Steel through IBC code in 2021. As per the deal, the company got the ownership stake of a 2.75 MTPA steel-making capacity in Odisha. The steelmaker had increased its stake in the capacity to 83% by October 2021.

The acquisition of Bhushan Power And Steel Limited made the Sajjan Jindal-led company one of the largest steelmaker in India. JSW Steel has paid Rs 19350 crore to the financial creditors of the debt-ridden company. BPSL is a leading manufacturer of flat and long products and has manufacturing plants in Chandigarh, Derabassi, Kolkata, and Odisha. BPSL's manufacturing plants cover the entire steel value chain right from coal mining to manufacturing of pig iron, DRBI Billets, HR Coils, etc.

JSW Steel Stock Price Movement

The company scrip touched a 52-week high mark of Rs 1,074.15 per share on BSE on 25 March, 2025. Whereas, the shares plummeted to their 52-week-low mark of Rs 824.1 on 4 June 2024.Its share price value has declined over 8.54% in one month. However, the stock value has overall increased by 6.71% year to date (YTD).