Shares of Jaiprakash Power Ventures Ltd (JP Power) experienced a significant rally on Monday, September 21, 2026, with the stock climbing nearly 10%. This surge follows the company's announcement of a substantial settlement agreement that promises to resolve a long-standing financial dispute.
Settlement Paves Way for IBC Withdrawal
JP Power informed stock exchanges that it has agreed to settle a claim by making a full and final payment of Rs 511 crore. This agreement, once all conditions are met and definitive documents are executed, will lead to the withdrawal of Insolvency and Bankruptcy Code (IBC) proceedings against the company. The company stated it would keep the exchanges informed of further developments as the settlement progresses.
The IBC application stemmed from a filing by the National Asset Restructuring Company Ltd (NARCL) before the National Company Law Tribunal (NCLT) on March 11, 2026. NARCL alleged a default of Rs 512 crore, including interest and other charges, related to a corporate guarantee extended by JP Power to Jaiprakash Associates Ltd (JAL). This guarantee pertained to JAL's external commercial borrowings (ECBs) from the State Bank of India (SBI). SBI had previously issued a demand-cum-recall notice in December 2023 and escalated the matter to the Debt Recovery Tribunal (DRT), New Delhi.
Debt Restructuring and Market Performance
This settlement marks another step in JP Power's ongoing efforts to streamline its financial structure. Following a major debt restructuring in April 2019, the company's total debt significantly decreased from Rs 11,149 crore as of March 31, 2019, to Rs 4,870 crore (including Rs 4,361 crore long-term debt) by December 31, 2022. As of March 31, 2026, the total debt stood at Rs 3,380 crore.
Amidst this development, Adani Power Ltd issued a clarification denying a media report that suggested it was planning to increase its stake in Jaiprakash Power Ventures to 51% before the end of 2026. Adani Power explicitly stated, "We would like to clarify that this article is entirely false. Adani Power Limited has not undertaken any such action, as claimed in the article."
Following the news of the settlement, JP Power shares rose 9.64% to touch a high of Rs 16.83 apiece on the BSE. Despite this significant daily jump, the stock remains down 5.7% year-to-date.