The largest steelmaker in India, with a capacity of 34.2 million tonnes (MT), has implemented a comprehensive revamp of the bankrupt firm’s steel mill post its takeover in March 2021, and

increased the steelmaking capacity to 4.5 MT from 2.75 MT in two phases. In addition, JSW Steel has debts of BPSL on its consolidated balance sheet.

JSW Steel will be filing the review petition within the Supreme Court's allowed timeframe—by Monday—against the liquidation order, said people familiar with the matter. Should the review

petition fail, the Committee of Creditors (CoC) will have to appoint a liquidator and execute liquidation under the supervision of the National Company Law Tribunal (NCLT).

failed to exercise its commercial wisdom while approving it.

The interim order followed an application to the NCLT by Sanjay Singhal, former promoter of BPSL, who sought liquidation based on the Supreme Court’s previous judgment. However, on May 26,

the Supreme Court temporarily halted the liquidation following a petition filed by JSW Steel. Representing the CoC, Solicitor General Tushar Mehta suggested that NCLT proceedings be

postponed until June 10 as a compromise. JSW Steel and BPSL were represented by Karanjawala & Co.

The case carries substantial implications, considering it reversed the insolvency process that was completed four years back under the IBC. JSW Steel has consolidated the mining, steelmaking

and sales operations with the parent company following the takeover. While asking for a halt to liquidation, JSW Steel told the Supreme Court that the liquidation verdict will be “fatal” to

BPSL and other stakeholders, including lenders and workers.

BPSL has liquid steel capacity in Jharsuguda, Odisha—primarily flat steel and downstream facilities in Kolkata and Chandigarh. The acquisition gave JSW Steel a strategic presence in eastern

India. JSW Steel management has increased the capacity of BPSL in two phases. In FY23, the capacity was increased from 2.75 MT to 3.5 MT and later to 4.5 MT. It is not clear from which book

JSW Steel funded the expansion. 

JSW Steel, controlled by Sajjan Jindal, said in its FY25 financial presentation that BPSL has an organic brownfield growth potential of around 5 MT. It is in addition to the 0.5 MT addition

planned by September 2027. BPSL posted a profit of ₹260 crore and ₹674 crore in FY25 and FY24, respectively, on steady revenues of ₹21,000 crore.

Fitch Ratings said in its report that JSW Steel’s crude steel capacity of 30MT will remain the highest in India’s steel market even without BPSL. “However, BPSL’s loss may put pressure on

JSW’s FY31 target of reaching 50MT domestic capacity,” the research firm said. 

JSW Steel’s EBITDA net leverage may improve by 0.4x to 2.8x in FY26 as a refund of the ₹19,350 crore upfront payment will more than offset the loss of BPSL’s 11% EBITDA contribution in FY26,

if the order is implemented, it added. The report said that BPSL’s ₹6,500 crore debt accounted for six percent of JSW’s debt in FY24, which JSW may need to clear—in addition to receiving

the refund—before handing the company back to the CoC, according to Fitch.

According to a CareEdge Ratings report in March, BPSL has long-term/ short-term bank facilities worth ₹14,030 crore and commercial paper of ₹1,000 crore on its books. The report said that

the company’s profitability showcased improvement in FY24, largely on the back of an increase in the sale of value-added steel products.

BPSL, which owed ₹47,200 crore to banks, was among the first dozen companies which were sent for debt resolution by the RBI in 2017 under the IBC. When JSW Steel took over the company in

2021, the lenders indemnified that the amount paid to them would be refunded to the steelmaker in case the verdict by the Supreme Court goes against the acquirer. The payment to financial

creditors in the IBC process for 100% stake was ₹19,350 crore, and the cash outgo from JSW Steel was ₹5,087 crore.