Kotak Alternate Assets Bids ₹7,400 Crore for Jaiprakash Power Ventures, Challenges Vedanta

Kotak Alternate Assets has emerged as the top bidder for Jaiprakash Power Ventures’ preference shares and debt, offering ₹7,400 crore, as per news reports. This move could hinder Vedanta’s plans following its ₹17,000 crore bid for Jaiprakash Associates Ltd, by gaining control over JP Power, the most valuable asset in JAL’s portfolio.

Kotak's Bold ₹7,400 Crore Offer Puts Vedanta’s Strategy at Risk

Kotak Alternate Assets has bid ₹3,805 crore for compulsorily convertible preference shares (CCPS) and ₹3,600 crore for debt in Jaiprakash Power Ventures. Upon conversion, the CCPS would provide Kotak with a 25% stake, triggering an open offer for another 26% as per SEBI regulations. A full subscription could enable Kotak Alts to control over 50% of JP Power, overpowering JAL’s current 24% stake.

Implications for Vedanta’s Bid for JAL

Vedanta recently placed a ₹17,000 crore bid and emerged as the front-runner for JAL, hoping to consolidate control over the holding company’s assets, including JP Power. Kotak’s entry and potential majority control in JP Power reduce JAL’s influence, which could disrupt Vedanta’s broader strategy post-acquisition.

Key Asset Under Scrutiny: JP Power Performance

Jaiprakash Power Ventures owns power generation assets with a total capacity of 2.2 GW, involving thermal and hydroelectric projects. The company reported an operating profit of ₹2,200 crore for FY24. With such performance, JP Power stands as the crown jewel among JAL’s subsidiaries, underscoring why multiple bidders are actively pursuing it.

Read More: Kotak Income Plus Arbitrage Fund Hits ₹5,000 Crore AUM Milestone in First Month!

Competitive Bidding and Upcoming Challenges

ICICI Bank-led lenders initiated the asset auction, which attracted players like Vedanta, Adani Power and Oaktree. However, Kotak Alts’ aggressive offer has positioned it as the likely dominant shareholder, adding complexity to Vedanta’s acquisition and potentially altering ownership patterns in the power sector.

Conclusion

Kotak Alternate Assets’ ₹7,400 crore offer for JP Power significantly alters the equation for Vedanta’s plans with JAL. The potential shift in control of JP Power could limit Vedanta’s sway over JAL’s most valuable asset, reshaping future stakes in India's dynamic power sector.

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