In a significant move to resolve a long-pending insolvency-linked issue, the National Company Law Appellate Tribunal (NCLAT) has cleared the path for the Rajasthan government to acquire a major stake in a key renewable energy joint venture. The tribunal has formally ordered the transfer of a 50% stake in IL&FS Energy Development Company Ltd (IEDCL) to the state government within their joint venture, Saurya Urja Company of Rajasthan Ltd (SUCRL).
Valuation and Legal Closure of the Deal
The stake has been valued at Rs 85.11 crore, a figure confirmed as the highest bid received for the asset. This decision brings an end to a prolonged legal process. The NCLAT noted that IL&FS had already extended an offer to the Rajasthan government to purchase this 50% stake, which the state formally accepted. The government's decision was recorded through a consent order dated November 3, 2025.
With both parties in agreement, the appellate tribunal stated that no further orders were necessary and disposed of all pending applications related to the matter. This legal closure is a crucial step in untangling projects caught in the wider IL&FS insolvency saga that began with the group's collapse in 2018.
Protection of Creditor Rights and Strategic Intent
A critical clarification from the NCLAT ensures that the ownership change will not disrupt existing financial arrangements. The tribunal underscored that all creditor claims linked to SUCRL will continue to be handled strictly under the approved IL&FS resolution plan. This means the transition will not alter the repayment structure or the priority of lenders, providing certainty to financial institutions involved.
The government's acquisition of a controlling half-stake signals a clear strategic intent. It aims to assume greater operational control over clean-energy assets that were trapped in the IL&FS gridlock. This move is designed to ensure that these strategic projects remain operational and under stable joint governance, rather than being stalled by protracted creditor disputes or liquidation uncertainties.
Background and Implications for Renewable Energy
IEDCL has been involved in several renewable and energy-sector ventures for the IL&FS group, many of which faced severe challenges following the parent company's downfall. The transfer of the stake in SUCRL to the Rajasthan government injects much-needed stability into a vital segment of the state's clean-energy infrastructure.
By taking direct equity participation, the state government positions itself to actively guide the future of these projects, aligning them with Rajasthan's broader energy security and sustainability goals. This intervention helps safeguard existing investments and jobs, while ensuring that the momentum in the renewable sector is maintained despite the corporate insolvency of the original promoter.
