SBI and Major Banks Lead the Way in Jaiprakash Associates’ ₹51,000 Crore Bankruptcy Case

State Bank of India (SBI), ICICI Bank, and IDBI Bank are crucial players in the ongoing bankruptcy case against Jaiprakash Associates (JAL), one of the largest insolvency cases since the Insolvency and Bankruptcy Code (IBC) was established in 2016. Together, these banks have claims amounting to over ₹51,000 crore.

As of the end of July, financial creditors, including homebuyers, are owed a total of ₹51,510 crore. SBI is the largest creditor with almost ₹15,500 crore, making up 30% of the debt, followed by ICICI Bank with 18% and IDBI Bank with 11%. These three banks control nearly 60% of the debt. With Life Insurance Corporation (LIC) holding an additional 6%, these four creditors have enough voting power to make decisions about the resolution plan.

Bankers believe that having a large portion of the debt consolidated with these key creditors could speed up the decision-making process, especially in such a complex case. JAL’s assets include cement plants, real estate around the Yamuna Expressway, hotels, an EPC business, power plants, a hospital, and the Buddh International Circuit.

Despite the potential value of these assets, lenders are cautious. They anticipate legal challenges from JAL’s promoters, disputes with government agencies like the Yamuna Expressway Industrial Development Authority (YEIDA), and multiple claims on the assets.

Interest in JAL’s assets is strong, and formal expressions of interest (EOIs) from potential buyers are expected in the coming weeks. However, lenders are aware that they might face litigation and other challenges during the process. Bhuvan Madan has been appointed as the interim resolution professional, and the enterprise valuation of JAL’s assets is still pending.

Lenders are hopeful for a positive outcome but remain guarded due to the complex nature of the case and the possibility of further legal battles. JAL’s promoters have already tried to delay the process for years, and the company recently sought to halt the bankruptcy process through the appellate tribunal, though the court refused to take action without first hearing from the creditors.