Lavasa Attracts Fresh Bids from Welspun, Jindal Steel and Others; Can It Be Revived?

Lavasa Corporation, the bankrupt private ‘hill station’ project, has received bids for its second resolution plan after its initial bid was annulled last year by the National Company Law Tribunal (NCLT). This time, major players such as the Welspun Group, Jindal Steel and Power, and Lodha Developers (formerly Macrotech Developers) are participating in the resolution process.

According to a report by The Economic Times (ET), at least six bids have been submitted for the project, ranging from ₹500 crore to ₹850 crore, with B.K. Goenka-led Welspun emerging as the highest bidder. Ashdan and Pride Purple have placed a combined bid amounting to ₹843 crore. In addition to these four, Mumbai-based Yogayatan Group and DB Corp subsidiary Valor have also submitted bids for the company.

The Lavasa project was launched in the early 2000s by Hindustan Construction Company under the leadership of industrialist Ajit Gulabchand, with construction starting soon after in the Western Ghats. By the mid-2000s, the city began to take shape, promoted as a smart, sustainable hill station. In 2010, it started attracting tourists and second-home buyers, featuring eco-friendly design elements by US-based architecture firm HOK.

However, in 2011, the Environment Ministry halted construction, citing environmental violations. This led to a three-year delay and major financial setbacks. Between 2011 and 2014, the project faced legal challenges, accusations of land grabs, and criticism for bypassing planning regulations.

Since 2015, attempts have been made to revive the project, but concerns over livability, infrastructure, and environmental impact have persisted into the 2020s.

Lavasa Corporation officially entered bankruptcy proceedings in August 2018 when the NCLT admitted an insolvency petition against the company. At the time, Lavasa’s total debt stood at around ₹6,642 crore.

Despite the highest current bid reaching ₹850 crore, the expected recovery is less than 13% of Lavasa’s total outstanding dues.

Conditional Bids

Most of the bids for Lavasa are conditional on the project receiving environmental clearance from the Maharashtra government—a key factor behind its financial troubles, as noted in the ET report. Only Yogayatan’s offer, valued at around ₹800 crore, is unconditional, making it a relatively strong contender.

However, it remains unclear whether lenders will seek to negotiate further. The matter continues under the NCLT’s debt resolution framework, with the Committee of Creditors (CoC) expected to meet and evaluate the bids.

Earlier, in July 2023, the NCLT had approved a resolution plan from Darwin Platform Infrastructure Ltd (DPIL), initially submitted in December 2021. The plan included a total payout of ₹1,814 crore over eight years and committed to handing over fully constructed homes to 837 homebuyers.

However, the Mumbai bench of the NCLT scrapped the resolution in September 2023 after a year-long hearing, citing DPIL’s failure to make the mandatory ₹100 crore upfront payment without valid justification. The tribunal then allowed the resolution process to restart.