Kotak Alternate Assets bids Rs 7,400 crore for Jaiprakash Power Ventures, complicating Vedanta's plans

Kotak Alternate Assets (Kotak Alts) has emerged the highest bidder for Jaiprakash Power Ventures Ltd’s compulsorily convertible preference shares and its debt with a cumulative offer of about Rs 7,400 crore, according to people in the know, potentially complicating Vedanta’s bid for holding company Jaiprakash Associates Ltd (JAL). Anil Agarwal-led Vedanta’s ability to exercise influence over a key asset of JAL could be hindered if control of Jaiprakash Power (JP Power) were to pass on to a third party like Kotal Alts. JAL, currently undergoing insolvency proceedings, is a 24% shareholder in Jaiprakash Power.Vedanta had emerged as the winning bidder for JAL on Friday, beating Adani Enterprises. JAL is the holding company of the Jaypee Group, which was once among the largest infrastructure-focused conglomerates with interests in real estate, power and cement.

The offer by Kotak Alts includes Rs 3,805 crore for the CCPS owned by the company’s lenders and Rs 3,600 crore for its debt, according to the people cited. The Kotak Alts offer for the CCPS could give it a 25% stake in JP Power if it converts the instruments. This would also trigger an open offer for a further 26% stake. If the open offer is fully subscribed, Kotak Alts may end up cornering more than half the company. That would put its ownership at double that of JAL in this key entity.JP Power has a total power generation capacity of 2.2 GW across three units — two thermal and one hydroelectric. It’s the most valuable company in the JAL portfolio, posting operating profit of Rs 2,200 crore in FY24. JP Power closed at Rs 19.26 Tuesday on the BSE, down 3.84%. The company’s lenders led by ICICI Bank had decided to auction the CCPS, ET had reported on July 29. Kotak Alternate Assets, Vedanta and ICICI Bank didn’t respond to queries.Vedanta, Kotak Alts, Adani Power and Oaktree had bid for JP Power’s CCPS, ET first reported on Thursday. The lenders had been allotted the CCPS as part of a debt restructuring deal by JP Power in 2019. On Friday, Vedanta made a Rs 17,000 crore offer for JAL. Lenders to JAL led by National Asset Reconstruction Co Ltd (NARCL) will vote on its offer. While Adani Enterprises had participated in the final bidding for JAL, other interested parties such as Dalmia Bharat, Jindal Power and PNC Infratech opted out.