NCLAT Gives A Nod to Adani Power's ₹4000 Cr. Acquisition

On 16 January the National Company Law Appellate Tribunal (NCLAT) delivered a decisive verdict. It upheld the acquisition of Vidarbha Industries Power Ltd (VIPL) by Adani Power Ltd (APL).

The appellate tribunal has dismissed petitions that challenged the deal. The tribunal has now confirmed the earlier order that was passed by the Mumbai bench of the NCLT on 18 June 2025.

The approved resolution plan’s valuation is ₹4,000 Cr (The Hindu BL). It includes the takeover of a 600 MW power generation facility located at Butibori in the Nagpur district of Maharashtra.

But shares of Adani Power witnessed a decline of 1.63%. The shares closed at ₹140.30/share on 19 January, despite the favourable ruling.

The Corporate Insolvency Resolution Process (CIRP) of Vidharbha Industries Power started on 30 September 2024. It had then faced scrutiny regarding adherence to statutory timelines (The Hindu BL). Now, the tribunal has found no merit in the objections.

So, the legal path is clear now. But there is an important question for the investors: does this acquisition signal a renewed consolidation phase for India’s thermal energy sector?

How This Acquisition Reshapes the Energy Sector?

The NCLAT’s approval of the Vidarbha Industries deal has added strength to the consolidation story within India's thermal power sector.

The project is integrating the 600 MW capacity of Vidarbha Industries into its portfolio. With this, Adani Power is raising its status as one of India's largest private thermal producers. It is also ensuring that crucial infrastructure is utilised efficiently.

In an ecosystem that is struggling with rising energy demand, the revival of distressed assets by established players can ensure that dormant capacity is brought back online. Even better is a chance to revive them without the extensive gestation periods associated with greenfield projects.

This is a strategic takeover, expected to enhance the operational efficiency of the Butibori facility. It can significantly contribute to better grid stability and power availability in Maharashtra' industrial belt.

The ruling has set an important legal example for the resolution of stressed assets across the energy value chain.

The ruling has also validated the differential treatment of creditors under the Insolvency and Bankruptcy Code (IBC). The tribunal has provided a clearer roadmap for future sector-specific insolvencies. This legal certainty is important for lenders and investors. It demonstrates that the regulatory framework is strong enough to protect value preservation during corporate restructuring.

Finally, a streamlined resolution process can also reduce systemic risk. It can allow financial institutions to clear bad loans and redirect capital toward India's broader energy transition goals.

How does this acquisition impact the creditor ecosystem?

An important aspect of the ruling was the treatment of different classes of creditors. The appellants had raised their concerns regarding the payouts allocated to operational creditors compared to financial creditors.

To address this, the NCLAT cited the Supreme Court precedent set in the Essar Steel case. The said case established that ‘the principle of equality cannot be stretched to treat unequals equally.’

The tribunal stated that the difference in payment between financial and operational creditors is clearly contemplated under the code. Meaning, it does not violate Section 30(2)(b) of the IBC.

This clarification has provided the required legal certainty not only for this specific deal but also for the broader distressed asset market. The ruling has declared that financial and operational creditors can be treated differently based on their standing. The ruling protects the commercial prerogatives of the Committee of Creditors (CoC).

Meaning, the Adani Power acquisition can proceed without the burden of additional liabilities that might have come from re-evaluation of creditor payouts.

Strengthening the Thermal Footprint

The confirmation of the Vidarbha Industries deal is a hallmark in Adani Power’s asset acquisition strategy. The company has reinforced its position as one of India’s largest private thermal power producers.

For investors, the ruling has removed a major regulatory hurdle. As the power sector gears up for higher demand, the ability to efficiently integrate and run such acquired assets will be crucial.

Source:

The Hindu BL
Scanx trade