Vidarbha Industries Power debt to be auctioned
POWER & RENEWABLE ENERGY

Vidarbha Industries Power debt to be auctioned

According to individuals familiar with the matter, the lenders of Vidarbha Industries Power have decided to conduct an auction to sell the company's debt before the end of September. During the meeting, the lenders assessed three offers: a one-time settlement proposed by the promoter company Reliance Power, as well as separate offers from CFM Asset Reconstruction Company (ARC) and the government-backed National Asset Reconstruction Company (NARCL).

Reliance Power has made the highest offer, amounting to Rs 12.60 billion. This offer includes an upfront payment of 10 per cent (Rs 1.26 billion), with the remaining balance to be paid within 75 days. It is worth noting that Varde Partners, which infused Rs 9.3 billion in September of the previous year, supports Reliance Power's offer by holding a 15 per cent equity stake in the company.

CFM ARC has offered Rs 12.2 billion, with 5 per cent to be paid upfront and the remainder to be paid over a period of 90 days.

NARCL's offer amounts to Rs 11.2 billion, comprising 15 per cent as upfront cash and the rest as security receipts (SR) payable over a span of five years. The government has guaranteed the shortfall in recovery from the SR.

Both Reliance Power and CFM ARC have suggested to the lenders that their respective offers be considered as anchor bids for the Swiss challenge auction. The anchor bidder holds an advantageous position in a Swiss challenge auction as they have the first right to match any counteroffer received by the lenders during the auction.

"To maximise recovery, the highest bidder is always selected as the anchor bidder," stated one of the lenders. "In this case, it is likely that the promoter's offer will be the anchor bid," they added.

The lenders of Vidarbha Industries Power include State Bank of India, Axis Bank, Bank of Baroda, Punjab National Bank, Canara Bank, and Bank of Maharashtra. These lenders have appointed SBI CAPS as the process advisor to oversee the sale of their debt.

As per a National Company Law Tribunal order dated January 29, 2021, the lenders have an exposure of Rs 29.87 billion to the power company.

Last July, the Supreme Court dismissed Axis Bank's petition to initiate insolvency proceedings against Vidarbha Industries, stating that the tribunal should have considered external factors contributing to the borrower's payment delays when approving the company's admission.

According to individuals familiar with the matter, the lenders of Vidarbha Industries Power have decided to conduct an auction to sell the company's debt before the end of September. During the meeting, the lenders assessed three offers: a one-time settlement proposed by the promoter company Reliance Power, as well as separate offers from CFM Asset Reconstruction Company (ARC) and the government-backed National Asset Reconstruction Company (NARCL).Reliance Power has made the highest offer, amounting to Rs 12.60 billion. This offer includes an upfront payment of 10 per cent (Rs 1.26 billion), with the remaining balance to be paid within 75 days. It is worth noting that Varde Partners, which infused Rs 9.3 billion in September of the previous year, supports Reliance Power's offer by holding a 15 per cent equity stake in the company.CFM ARC has offered Rs 12.2 billion, with 5 per cent to be paid upfront and the remainder to be paid over a period of 90 days.NARCL's offer amounts to Rs 11.2 billion, comprising 15 per cent as upfront cash and the rest as security receipts (SR) payable over a span of five years. The government has guaranteed the shortfall in recovery from the SR.Both Reliance Power and CFM ARC have suggested to the lenders that their respective offers be considered as anchor bids for the Swiss challenge auction. The anchor bidder holds an advantageous position in a Swiss challenge auction as they have the first right to match any counteroffer received by the lenders during the auction.To maximise recovery, the highest bidder is always selected as the anchor bidder, stated one of the lenders. In this case, it is likely that the promoter's offer will be the anchor bid, they added.The lenders of Vidarbha Industries Power include State Bank of India, Axis Bank, Bank of Baroda, Punjab National Bank, Canara Bank, and Bank of Maharashtra. These lenders have appointed SBI CAPS as the process advisor to oversee the sale of their debt.As per a National Company Law Tribunal order dated January 29, 2021, the lenders have an exposure of Rs 29.87 billion to the power company.Last July, the Supreme Court dismissed Axis Bank's petition to initiate insolvency proceedings against Vidarbha Industries, stating that the tribunal should have considered external factors contributing to the borrower's payment delays when approving the company's admission.

Next Story
Infrastructure Urban

CFI Appoints New National Council for FY27 and FY28

The Construction Federation of India (CFI) has announced its newly elected National Council and office bearers for a two-year term covering FY27 and FY28. M. V. Satish, Advisor to CMD and Lead Ambassador for Middle East, L&T, has been elected President; Priti Patel, Chief Strategy & Growth Officer, Tata Projects, has been appointed Vice President; and Ajit Bhate, Managing Director, Precast India Infrastructures, has taken charge as Treasurer.The newly formed National Council brings together senior leaders from major EPC and infrastructure companies, reflecting CFI’s continued focus o..

Next Story
Infrastructure Urban

India REIT Market Gains Momentum with Strong Returns

India’s Real Estate Investment Trust (REIT) market is witnessing strong growth, emerging as a competitive investment avenue both domestically and across Asia. According to a recent ANAROCK report released at EXCELERATE 2026 by NAREDCO Maharashtra NextGen, the sector is evolving into a mature asset class driven by solid fundamentals, regulatory backing and rising investor confidence.The introduction of Small and Medium REITs (SM REITs) in 2025 has further widened access through fractional ownership, unlocking a potential monetisation opportunity of Rs 670–710 billion. Indian REITs have deli..

Next Story
Infrastructure Energy

G R Infraprojects Secures Rs 4,130 Million BESS Contract From NTPC

G R Infraprojects said it has secured a contract from NTPC to supply and implement a battery energy storage system (BESS) valued at Rs 4,130 million (mn). The company reported the order was awarded as part of NTPC's ongoing efforts to enhance grid flexibility and energy storage capacity. The contract represents a notable addition to the firm's project pipeline and underscores demand for utility scale storage solutions. The award is expected to strengthen G R Infraprojects' presence in the energy infrastructure sector and to contribute to the firm's order book and future revenues, subject to st..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement