GVK Power & Infrastructure Limited has informed the Exchange about General Updates
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GVK Power & Infrastructure informed the exchanges that the NCLT Hyderabad Bench has admitted its subsidiary GVK Energy Limited into the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, following a petition by IDBI Bank Limited. The debt in question relates to a corporate guarantee given by GVK Energy for loans of around Rs 733.85 crore (term loan) and Rs 153.75 crore (working capital) taken by GVK Power (Goindwal Sahib) Limited to set up a thermal power plant in Punjab. The total claimed default is about Rs 1,494.94 crore as on 1 March 2023, reduced to roughly Rs 1,106.78 crore after Rs 306.02 crore was recovered under GVK-Goindwal's own resolution plan. The NCLT rejected GVK Energy's arguments that the debt was extinguished after the resolution plan and ruled the corporate guarantee remained enforceable. The order was passed on 6 May 2025 and shared with exchanges on 9 May 2025. Notably, GVK Power & Infrastructure itself is already marked as 'Under CIRP' on its letterhead.
This is a clearly negative development for shareholders. With GVK Power & Infrastructure itself already under insolvency proceedings, the admission of subsidiary GVK Energy into CIRP deepens the distress across the GVK group, raises uncertainty over asset values and recovery for equity holders, and signals that lenders are actively pushing defaulting group entities into formal resolution.