Vedanta Limited has emerged as the front-runner in the bid to acquire the debt-laden Jaiprakash Associates Ltd (JAL), outbidding the Adani Group in a challenge auction conducted by lenders. Vedanta's offer involves an upfront payment of ₹4,000 crore, with the remaining balance to be paid over five to six years. This staggered payment plan results in a net present value (NPV) of ₹12,505 crore for Vedanta's bid.

The Anil Agarwal-owned mining conglomerate's bid is currently the highest recovery plan for JAL, which has admitted claims from lenders exceeding ₹59,000 crore. However, even with Vedanta's offer, banks are expected to take a considerable haircut of around 71%.

Vedanta's winning bid encompasses the entirety of Jaiprakash Associates, which has interests in real estate, cement, power, hotels, and roads. Sources indicate that Vedanta aims to leverage JAL's assets, particularly its limestone and coal mines, and integrate JAL's power business after Vedanta's own power business is demerged. The company also intends to explore the development potential of JAL's real estate assets through strategic partnerships.

The Committee of Creditors (CoC), led by NARCIL, has identified Vedanta as the H1 bidder. The decision came after a challenge process involving five bidders: Vedanta, Adani Group, Dalmia Bharat Cement Ltd, Jindal Power Ltd, and PNC Infratech Ltd. While Vedanta has been recognized as the top bidder, the CoC is yet to formally conclude the resolution process and vote on the plan, which is anticipated to take an additional four to eight weeks. Following the CoC's approval, the implementation of the resolution plan is projected to take another three to four months.

As of August 15, Jaiprakash Associates had an outstanding debt of ₹55,371.21 crore. Vedanta's offer of ₹12,505 crore (NPV) is structured with an initial payment of ₹4,000 crore following approval from the National Company Law Tribunal (NCLT), with the remaining amount to be disbursed over the subsequent five to six years. Sources suggest that this initial approval from NCLT could take approximately a year.

The staggered payment structure will be supported by Vedanta's balance sheet and JAL's internal accruals, reducing over-dependence on Vedanta's financial resources. NPV is a capital budgeting technique used to assess the profitability of a project by comparing the present value of future cash inflows to the initial investment cost, accounting for the time value of money.

On the stock market front, Vedanta's shares closed at ₹445.80 on the National Stock Exchange on Friday, marking a 2.32% increase. Conversely, Jaiprakash Associates' shares closed 4.75% lower at ₹3.61 apiece on the Bombay Stock Exchange (BSE).