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CCPS Conversion Uncertainty in Jaiprakash Power Ventures Ltd (JPVL) Clouds Jaiprakash Associates' Debt Resolution

Ambiguity around the potential conversion of Rs3,800 crore worth of compulsory convertible preference shares (CCPS) in Jaiprakash Power Ventures Ltd (JPVL) is complicating the debt resolution process of its parent company, Jaiprakash Associates Ltd (JAL). JPVL, with a market cap of over Rs12,000 crore, is JAL’s most valuable asset and a key component in the insolvency process. However, since the timeline for CCPS conversion is open-ended—allowing conversion “after 20 years or earlier”—potential bidders, including major firms like Adani Enterprises, Vedanta, GMR, and Dalmia Cement, are uncertain about how much equity in JPVL will remain with JAL post-conversion.

Currently, JAL holds only 24% in JPVL, with most promoter shares pledged. A potential conversion could dilute this stake further, affecting bidder control. This uncertainty has led bidders to demand clarity from lenders on their future strategy regarding the CCPS. The conversion issue is now causing delays in the Corporate Insolvency Resolution Process (CIRP), with the final deadline for submission of resolution plans extended to June 24, 2025.

JPVL continues to operate 2.2 GW of thermal and hydro power assets profitably. The broader Jaypee Group’s other assets include cement plants, hospitality ventures, and prime land parcels. The situation underscores the need for clarity on equity structure to unlock bidder confidence and complete the resolution process.