Status Quo Ordered by Apex Court Amid Legal Uncertainty in BPSL Liquidation
In a significant development surrounding the insolvency proceedings of Bhushan Power and Steel Ltd (BPSL), the Supreme Court of India has directed that status quo be maintained regarding the company’s liquidation, following the indication from JSW Steel that it intends to file a review petition. The order came days after BPSL’s former promoter, Sanjay Singhal, approached the National Company Law Tribunal (NCLT) seeking liquidation based on the Supreme Court’s judgment dated May 2, 2025. Live Law reported that the apex court has withheld any liquidation actions until it can review JSW Steel’s legal challenge to the ruling, underscoring that status quo is essential “in the interest of justice.” According to Bar & Bench, the top court’s observation confirms that no coercive steps should be taken until the review petition is duly disposed of.
Highlights:
Supreme Court halts liquidation process of BPSL, citing need for status quo.
JSW Steel plans to file a review petition challenging May 2 verdict.
Former promoter Sanjay Singhal had initiated liquidation proceedings through NCLT.
Review petitions under SC rules must be filed within 30 days of verdict.
Background: JSW Steel’s Rs 20,000 Crore Acquisition of BPSL Under IBC Framework
The legal conflict follows years of strategic efforts by JSW Steel to acquire Bhushan Power and Steel under the framework of India’s Insolvency and Bankruptcy Code (IBC). In September 2019, JSW Steel’s resolution plan, valued at just under Rs 20,000 crore, received approval from the NCLT, paving the way for the formal acquisition. The transaction faced multiple delays due to pending litigation and regulatory clearances, and the acquisition was ultimately completed in March 2021. Since then, BPSL has been integrated into JSW Steel’s operational structure, with the unit contributing to both production and earnings. The May 2 Supreme Court ruling unexpectedly disrupted this stability, as it raised questions over the legitimacy of the asset transfer and opened the door to renewed liquidation proceedings.
Highlights:
JSW Steel’s Rs 20,000 crore acquisition of BPSL finalized in March 2021.
Resolution approved by NCLT under IBC after lengthy delays.
Supreme Court’s May 2 ruling introduced legal uncertainty over completed acquisition.
JSW Steel’s Review Bid Seeks to Safeguard BPSL’s Corporate Integrity and Operations
JSW Steel is preparing a formal review petition to contest the implications of the Supreme Court’s earlier judgment that enabled Sanjay Singhal to pursue liquidation. The move is seen as a critical step by JSW to protect its operational control and corporate investment in BPSL. The legal ambiguity has cast a shadow over one of India’s landmark IBC-driven takeovers, raising broader concerns about the sanctity of approved resolution plans and finality of judicial decisions in insolvency cases. Legal experts suggest that the apex court’s willingness to consider a review reflects the complexities involved in balancing the interests of past promoters, resolution applicants, and judicial oversight in high-value cases.
Highlights:
JSW Steel seeks judicial clarity to prevent reversal of completed acquisition.
Legal experts view review petition as crucial to safeguard precedent in IBC cases.
Supreme Court’s intervention indicates high judicial sensitivity to stakeholder impact.
BPSL Reports Strong Operational Performance in March Quarter Amid Legal Cloud
Despite the legal headwinds, BPSL delivered a stable financial performance in the March 2025 quarter, highlighting the operational strength of the business under JSW Steel’s management. Crude steel production for the quarter reached 0.98 million tonnes, while sales volumes came in at 0.94 million tonnes. The company reported Rs 5,635 crore in revenue from operations and an operating EBITDA of Rs 570 crore, marking a 5 percent quarter-on-quarter increase. The improvement in EBITDA was driven by higher sales volumes and a moderation in coking coal costs. BPSL also registered a profit after tax of Rs 42 crore, reinforcing JSW Steel’s assertion that the entity remains financially healthy and strategically important to its consolidated steel portfolio.
Highlights:
Crude steel production at 0.98 million tonnes; sales volume at 0.94 million tonnes.
Operating EBITDA of Rs 570 crore rose 5% sequentially due to lower input costs.
Profit after tax of Rs 42 crore signals operational stability amid litigation.
JSW Steel Posts 13.54% Rise in Consolidated Net Profit for Q4 FY25
At the group level, JSW Steel reported a 13.54 percent year-on-year rise in consolidated net profit, reaching Rs 1,501 crore for the March 2025 quarter. The positive earnings reflect resilient demand, improved operating margins, and efficiency gains across key facilities, including the contribution from BPSL. The company’s performance also underscores the strategic value of BPSL within JSW’s integrated supply chain. However, analysts remain watchful of the ongoing legal proceedings, as any reversal or impairment of BPSL’s status could affect the group’s long-term capital planning and balance sheet strength.
Highlights:
JSW Steel’s Q4FY25 net profit stood at Rs 1,501 crore, up 13.54% YoY.
BPSL operations contributed positively to consolidated financials.
Market remains cautious pending resolution of BPSL legal battle.
