The UK-based Indian billionaire Sanjeev Gupta-owned Liberty House will not engage in a bidding war with JSW Steel in the insolvency-driven resolution process for Bhushan Power and Steel.

The company will wait for the NCLAT (National Company Law AppellateTribunal) hearing on September 6 to understand whether revision of bids is allowed at the last moment.

“The court will decide if JSW Steel is qualified to revise the bid late. We are unlikely to enter into a price war as our bid is already very high reflecting our strategic desire to enter the Indian market. We do not see any logic in revising our bid higher but will decide after the court hearing,” said sources close to the company.

Revised bids

The three-way fight to acquire the stressed asset of Bhushan Power got an interesting twist when JSW Steel revised its bid twice. On August 14, it hiked its offer by ₹700 crore to ₹19,700 crore to pip both Tata Steel and Liberty House, which had retained their bids at ₹17,000 crore and ₹18,500 crore even after NCLAT gave opportunity twice to better JSW Steel bid.

Every company has its own calculation to arrive at a price based on their ability to turnaround the stressed asset and new business opportunity it can throw open, but care should be taken to ensure that the sick company does not take the winning bidder down the drain, said an analyst.

JSW Steel may have gone aggressive on Bhushan Power to retain its crown as the largest private sector steel company and get a foothold in the northern market, he added.

NCLAT’s view

Tata Steel had emerged the winner in the first round of bidding, but NCLAT directed Bhushan Power’s Committee of Creditors to go for rebids after the other firms expressed a wish to increase their offers.

Tata Steel appealed to the Supreme Court against the NCLAT decision to consider revised bids. However, the apex court refused to stay the NCLAT order.

NCLAT could not consider the highest bids placed by CoC during the last hearing on August 17 due to the demise of former Prime Minister Atal Bihari Vajpayee and posted the next hearing on September 6.