India’s Supreme Court has temporarily halted the liquidation process of Bhushan Power and Steel (BPSL), offering a potential reprieve to JSW Steel just weeks after its $2.3 billion acquisition deal was scrapped.
The decision comes in response to a request by JSW Steel and a group of BPSL’s creditors, who informed the court of their intent to file a review petition against the May 2 ruling that invalidated the acquisition and ordered the company’s liquidation. That earlier verdict, delivered after a prolonged legal battle, had thrown India’s insolvency and bankruptcy framework into uncertainty—particularly among investors eyeing distressed assets.
In its Monday order, the Supreme Court paused proceedings at the National Company Law Tribunal (NCLT) in New Delhi, where liquidation proceedings were set to take place. The court clarified that the stay would remain in effect until the review petition is formally filed and considered.
JSW Steel’s shares reacted positively to the development, climbing 2.2% after the decision and hitting the session’s high.
The stalled acquisition has lingered since it was first approved six years ago. Analysts and legal experts have noted that the scrapping of the deal not only jeopardized this high-profile buyout but also sent ripples across the landscape of India’s bankruptcy reforms, introduced in 2016 to expedite the resolution of bad debt.
The Supreme Court’s stay is viewed as a critical window for JSW Steel and BPSL’s creditors to revive the deal or at least contest its cancellation through legal channels.
