Adani Group’s Rs 12,500 crore offer for the troubled KSK Mahanadi Power has sparked fierce competition among other bidders, who are now revising their bids in response to Adani's aggressive move. Industry insiders anticipate the final bid values could surpass initial expectations.
The lenders of KSK Mahanadi Power, an asset struggling under debt, are optimistic about achieving full recovery—a rare feat under the Insolvency and Bankruptcy Code (IBC). The Committee of Creditors (CoC) Challenge Mechanism, activated to spur competing offers, seems to have successfully revived bidder interest. Adani's substantial offer, which sits at a striking 62% above the next highest, catalyzed other parties to boost their bids, with six out of the initial ten bidders, including NTPC, responding with more competitive figures.
KSK Mahanadi Power's financials, including Rs 10,000 crore in cash reserves and an additional Rs 4,000 crore in trade receivables, make Adani’s offer potentially capable of covering about 92% of the asset’s debt, marking it as a major success for IBC's goal of value maximization.
Situated in Chhattisgarh, the 1,800 MW KSK Mahanadi Power project accumulated Rs 29,330 crore in debt before it entered IBC proceedings in 2019. Early bids, primarily from energy giants like JSW Energy, Jindal Power, Vedanta, NTPC, and Coal India, ranged between Rs 6,500 crore and Rs 7,700 crore. Adani’s aggressive bid came after acquiring Lanco Amarkantak and Coastal Energen through similar IBC proceedings, underscoring its ambitions in India’s energy sector.
To further bolster competition, the CoC employed the Challenge Mechanism, spurring several bidders to revise their offers closer to Adani’s. This approach has not only raised the stakes but also ignited a broader discussion on the implications of heightened corporate interest within the framework of India’s insolvency laws. Adani’s offer has highlighted the IBC’s dual objectives: maximizing asset value while ensuring efficient restructuring, setting a significant precedent in the corporate recovery landscape.
This project, carrying a debt load of approximately Rs 29,330 crore, entered the bankruptcy resolution process in 2019. Adani Power led with the highest bid of Rs 12,500 crore, outpacing major contenders such as JSW Energy, Jindal Power, Vedanta, NTPC, and Coal India, whose offers ranged between Rs 6,500 crore and Rs 7,700 crore. Following this, the committee of creditors implemented a bid challenge mechanism, prompting the remaining bidders to raise their offers.
