Dalmia Cement's Bid for Bankrupt JP Associates Gets CCI Nod, But Hurdles Remain

Puneet Yadu Dalmia-led Dalmia Cement (Bharat) Limited on Tuesday cleared the first hurdle in its bid to acquire bankrupt Jaiprakash Associates Limited (JAL), a conglomerate with interests ranging from real estate to hospitality. Its proposal has received approval from the Competition Commission of India (CCI) and will now move to the Committee of Creditors (CoC) of JP Associates for a final decision.

“The proposed combination envisages 100% acquisition of Jaiprakash Associates Limited (JAL) by Dalmia Cement (Bharat) Limited pursuant to a corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016,” the CCI said in a release.

It is important to note that Dalmia Bharat Limited (DBL)'s cement arm is not the only bidder for the company, which is undergoing insolvency resolution. Adani Group, Vedanta Group, Jindal Steel & Power Ltd (JSPL) and PNC Infratech have also submitted resolution plans.

However, Dalmia is currently the only bidder to have secured CCI clearance.

This requirement for antitrust approval was introduced in insolvency cases in January following a Supreme Court ruling. In Independent Sugar Corporation Ltd. vs Girish Sriram Juneja, the apex court held that if a resolution plan under the Insolvency and Bankruptcy Code (IBC) involves a “combination” under the Competition Act, CCI approval must be obtained before the CoC approves the plan.

Reports suggest that the Ministry of Corporate Affairs may amend this provision in the proposed Insolvency and Bankruptcy Bill.

What Lies Ahead for JP Associates

Jaiprakash Associates entered the corporate insolvency resolution process last year. Its lenders include Axis Bank, State Bank of India, Yes Bank, Bank of Maharashtra, Canara Bank, Bank of Baroda, ICICI Bank, Indian Overseas Bank and IDBI Bank, among others.

As of 25 July, the company’s total debt stood at ₹55,372 crore.

While multiple resolution plans have been received, most—including Dalmia’s—are conditional. Bidders are awaiting the Supreme Court’s final decision on Jaiprakash’s 1,000-hectare Sports City project in Greater Noida. The Yamuna Expressway Industrial Development Authority (YEIDA) had cancelled the land allotment, a decision upheld by the Allahabad High Court in March.

In its last meeting, the CoC reportedly asked applicants to submit revised plans without conditions and with definitive bid amounts.

So far, Adani Group is the only bidder to have submitted an unconditional offer. Though lower than rival bids, Adani has proposed ₹12,600 crore, while other bids are as high as ₹14,000 crore for the real estate-to-cement conglomerate.