NBCC India leads race for Jaypee Infratech with Rs 1,000-crore offer

Lenders to vote on Jaypee Infra bidder from Wednesday

Indian lenders of Jaypee Infratech are set to vote from Wednesday on the two offers made by the government-owned NBCC India and Suraksha Asset Reconstruction. The highest bidder will be announced by Saturday. While NBCC has made an offer of Rs 1,000 crore as upfront cash, Suraksha’s offer was far less at Rs 10 crore.

In the committee of creditors’ (CoC) meeting held in New Delhi on Monday, the CoC has also decided to consider the request made by the homeowners of Jaypee Infratech for a forensic audit of the company. The homeowners got a seat at the CoC table after the Supreme Court’s (SC’s) intervention last year.

Jaypee Infratech was one of the 40-odd companies identified by the Reserve Bank of India in 2017 for debt resolution under the Insolvency and Bankruptcy Code, 2016. Jaypee Infratech, which has large tracts of land bank on both sides of the Yamuna Expressway, had defaulted on its debt worth Rs 9,913 crore and did not deliver apartments to homeowners after taking the booking amount.

Lenders said the proposal made by NBCC India is far better and will receive their approval. NBCC will raise a fresh debt of Rs 2,000 crore and complete the stalled project in four years. “The lenders are keen on NBCC due to its better financial metrics. Besides, the lenders do not want any uncertainty, especially after the upheaval at the Suraksha group – owned by Sudhir Valia, a co-promoter of Sun Pharmaceutical Industries,” said a source close to the development.

The pharmaceutical company’s shares witnessed a sharp fall since December after reports that a whistle-blower complained to the Securities and Exchange Board of India alleging corporate governance lapses and related party transactions not previously disclosed to shareholders.

Valia is one of the promoters of Sun Pharma and had raised funds by pledging his equity with lenders to invest in the real estate sector. After the fortunes of the real estate sector declined, the Suraksha group had difficulties raising funds.

Interestingly, in May last year, the Indian lenders had rejected an offer made by the special purpose vehicle floated by the Suraksha group, saying the upfront cash was too low and the offer was not attractive enough. Later, in August 2018, the SC ordered re-bid of Jaypee Infratech after an amendment in the insolvency code, which bought homebuyers on a par with the financial creditors.

Suraksha Asset Reconstruction was incorporated in October 2015 and it received its asset reconstruction company licence in September 2016. As on January 31, 2018, the company managed 26 accounts with aggregate cost of assets under management of Rs 3,570 crore. For 2016-17, its total operating income was Rs 68 lakh and profit of Rs 9 lakh, according to a CARE Ratings statement issued in March last year.

On the other hand, for the financial year ended March 2018, NBCC India reported revenues of Rs 5,905 crore and profit of Rs 333 crore. For the quarter ended December 2018, NBCC India’s net profit was Rs 78 crore and it earned revenues of Rs 1,652 crore. As on Monday, NBCC India had a market capitalisation of Rs 9,054 crore.

NBCC India: Racing ahead

• Revenues: Rs 5,905 cr*
• Profit:  Rs 333 cr*
• Market cap: Rs 9,054 cr#

* Financial year 2018 | # As on Monday