The retail investors of Jaiprakash Associates will be the final losers in the epic battle between the Adanis and Anil Agarwal to take control of the bankrupt company.
The resolution plans of both Adani Enterprises and Vedanta have not made any provision to pay anything to 645,466 public shareholders. The floating market-cap of ₹405 crore of JAL will be completely wiped-out after the resolution plan is approved.
The nine-year-old insolvency case has gone through many ups and downs with the Committee of Creditors initially announcing Vedanta’s bid of ₹17,926 crore as the highest bidder, but approved the ₹14,535 crore bid of Adani Enterprises.
Following this, NCLT also approved the Adani Enterprises resolution plan for JAL. However, Vedanta has moved NCLAT against the NCLT verdict. After hearing both the companies, NCLAT has reserved its judgement in the case on Wednesday.
No residual value
With creditors taking priority under IBC and recoveries falling short for secured lenders, no residual value remains for equity investors, resulting in total erosion of shareholders wealth.
Under the resolution plan of both bidders, the entire existing shareholding structure of JAL will be wiped out.
Sunayana Basu Mallik, Partner, King Stubb & Kasiva, Advocates and Attorneys said to enhance credibility among the public with respect to stock exchanges and listed companies, the government may consider framing binding regulations within the scheme of the IBC to refund the consideration received from the public equity shareholders before proceeding with the CIRP.
The responsibility to make such payouts should vest in the resolution applicant and the CoC approving the plan, adding to the cost and overall burden of taking over a loss-making entity, he said.
A special corpus
Alternatively, he added the government may consider creating a special corpus within the scheme of the IBC, specifically maintained to make payouts to retail investors, thus reducing the burden on the successful resolution applicant.
Any step that recognises the rights of public equity shareholders and implements a mechanism will enhance confidence in the stock exchange and listing process in India and make CIRP process inclusive, fair and transparent, said Mallik.
Asav Rajan, Associate Partner, IndiaLaw LLP said requiring Resolution Applicants to pay shareholders at least face value in insolvencies challenges the statutory priority structure under 53(h).
It promotes shareholders to quasi-creditors and weakens established limited liability and risk allocation principles, which assume shareholders accept the risk of loss for potential gains, he added.
Published on April 23, 2026