The Indian government is finalizing its response to a Supreme Court ruling that annulled JSW Steel's 2021 acquisition of Bhushan Power and Steel, valued at ₹19,700 crore ($2.35 billion). The court's decision has significant implications for the country's insolvency framework and the steel industry.

The acquisition was completed under India's Insolvency and Bankruptcy Code (IBC) after Bhushan Power defaulted on debts exceeding ₹47,000 crore ($5.58 billion). However, the Supreme Court found procedural lapses in the resolution process, including failures by the insolvency administrator and the creditors' committee to fulfill legal obligations, leading to the annulment of the deal and the order for Bhushan Power's liquidation.

M Nagaraju, Secretary of the Department of Financial Services, stated that the government has reviewed the ruling with lenders and legal advisors and is in the process of finalizing its approach.

The court's decision has affected JSW Steel's stock performance, with shares falling approximately 5.5% on Friday and an additional 1% on Monday. JSW Steel has yet to announce its next steps.

The ruling raises concerns about the stability of India's insolvency framework and its impact on investor confidence. The government's forthcoming response will be closely watched by stakeholders across the financial and industrial sectors.