IPCL BTA faces potential avoidance review during CIRP process

India Power Corporation Limited (IPCL) says its resolution professional is reviewing the 2 June 2025 Business Transfer Agreement for potential avoidance action during Corporate Insolvency Resolution Process, after IPCL Power Limited allotted 1,85,31,475 fully paid equity shares of Rs 10 each for the non-regulated business transferred on 28 June 2025.

What IPCL transaction is under review?

IPCL’s resolution professional is reviewing the Business Transfer Agreement, or BTA, dated 2 June 2025 between IPCL and IPCL Power Limited. The agreement transferred IPCL’s non-regulated business to IPCL Power, described in the disclosure as IPCL’s wholly owned subsidiary, through a slump sale.

The transfer took effect on 28 June 2025, following approval by IPCL’s members through a postal ballot on 26 June 2025. IPCL Power allotted 1,85,31,475 fully paid equity shares with a face value of Rs 10 each as consideration other than cash. The disclosure says the slump sale was based on a valuation report from a valuer registered with the Insolvency and Bankruptcy Board of India, or IBBI.

IPCL has not disclosed a cash value for the non-regulated business, the valuation conclusion, or an itemised list of the assets and operations transferred. The notice identifies the non-regulated business alone as the subject of the 28 June 2025 transaction, without describing IPCL’s remaining regulated operations.

Why is IPCL’s BTA being examined under the Insolvency and Bankruptcy Code?

IPCL’s resolution professional is examining the BTA under the Insolvency and Bankruptcy Code, 2016, including potential avoidance proceedings under Sections 43 to 51 and Section 66. The 4 November 2026 disclosure does not say that the BTA was avoidable, invalid or improper, and does not state that any application has been filed.

The review follows the National Company Law Tribunal, Hyderabad Bench-I, admitting IPCL to the Corporate Insolvency Resolution Process, or CIRP, on 15 May 2026. The tribunal appointed Medarametla Srinivasa Manoranjani as interim resolution professional, and the Committee of Creditors, or CoC, subsequently confirmed her as resolution professional under Section 22 of the Code.

As part of CIRP, the resolution professional has appointed a transaction review auditor to assist in identifying avoidance transactions under Sections 43, 45, 49, 50 and 66. IPCL has also appointed registered valuers to value the company in accordance with the Code, so the BTA review sits within the insolvency process rather than representing a disclosed final conclusion on the June 2025 transfer.

The filing does not state whether the transaction review auditor has completed its work, whether the valuers have submitted reports, or whether other transactions are being reviewed. It identifies the 2 June 2025 BTA as being under review and permits examination under other applicable laws and regulations as well as the cited Code provisions.

Could the BTA review change IPCL’s financial statements?

IPCL says necessary accounting changes will be made in financial results or statements if they arise from the transaction review audit and valuation reports. The statement makes any adjustment conditional, and the disclosure dated 4 November 2026 provides neither a potential amount nor a timetable for an accounting entry.

The unaudited standalone and consolidated financial results concerned the quarter ended 30 June 2026 and were adopted on 29 October 2026 by a management committee comprising suspended directors and the resolution professional. The filing says the resolution professional, a whole-time director and IPCL’s chief financial officer signed the results.

IPCL states that the resolution professional’s signature does not constitute approval, confirmation or ratification of the BTA, whether express or implied. The notice also characterises the results as relating to a period before the 15 May 2026 commencement of CIRP and before the resolution professional’s appointment, while identifying the reported quarter as ended 30 June 2026.

The resolution professional says she signed the results in good faith for compliance with the Companies Act, 2013 and the Securities and Exchange Board of India listing regulations. She relied on information and representations provided by IPCL’s directors and management, and says she did not independently analyse the data available when the results were signed on 29 October 2026.

Who controls IPCL during the CIRP process?

IPCL is being managed as a going concern by the resolution professional following its admission to CIRP on 15 May 2026. The filing says the board’s powers are suspended under the Code, while directors must continue to perform duties and responsibilities under applicable laws, including the Companies Act, 2013 and listing regulations.

The resolution professional says her review was limited to information available at the time of signing and disclaims responsibility for the accuracy, authenticity, veracity or completeness of the data in the statement of accounts. That qualification covers IPCL’s disclosed financial position and performance in the quarter ended 30 June 2026.

IPCL also cites Section 233 of the Code in relation to actions such as the signing of the results. The disclosure says that no suit, prosecution or legal proceeding shall lie against the resolution professional for actions undertaken in good faith, while separately preserving the review of the 2 June 2025 BTA.

What has IPCL not yet decided about the business transfer?

IPCL has not disclosed whether the BTA review will result in avoidance proceedings, a tribunal application, a recovery, a reversal or an accounting adjustment. As of 4 November 2026, the filing says only that the 2 June 2025 agreement is under review and that accounting changes will be made if warranted by audit and valuation findings.

IPCL has also not disclosed the valuation placed on the non-regulated business, despite stating that the 28 June 2025 slump sale relied on an IBBI-registered valuer’s report. The consideration disclosed is 1,85,31,475 IPCL Power equity shares of Rs 10 each, rather than a stated rupee valuation of the transferred business.

The timing separates the underlying transaction from the insolvency process: the transfer became effective on 28 June 2025, while CIRP began on 15 May 2026. The filing gives no completion date for the transaction review audit or the company valuation, and does not specify the financial reporting period in which a possible adjustment would appear.

Conclusion

IPCL’s disclosure establishes that the June 2025 transfer of its non-regulated business has not been treated as settled by the later signing of the quarter ended 30 June 2026 results. The resolution professional is reviewing the BTA for potential avoidance action, supported by a transaction review auditor and registered valuers appointed during CIRP.

The next disclosed matters to watch are the transaction review audit and valuation reports, because IPCL says they may lead to accounting changes. IPCL has not disclosed an avoidance application, tribunal action, valuation outcome or financial adjustment as of 4 November 2026.