Brand Games

Understanding the Rise, Fall and Revival of Bhushan Power and Steel

Created on 16 Oct 2020

Wraps up in 5 Min

Read by 4.5k people

Updated on 10 Sep 2022

bhushan power and steel

Bhushan Power and Steel Limited which was once a leader in the Indian steel sector is now in the headlines again. You might have witnessed a company going from nothing to reaching the top of the pyramid. And then, there are others which were once a shining-star and became a fallen star later.

But today we will learn about the company which fell from riches to rags in no time while its promoter seemed to have become even richer. Something smells fishy, right?

So, we will dissect Bhushan power and steel and find out how times changed for the once-great company.

History and growth story of Bhushan Power and Steel

Kickstarting its operations in 1970, Bhushan power and steel (BPSL) was involved in manufacturing and marketing steel and steel-related products. Led by it's CMD Sanjay Singal, the company ultimately placed its focus on manufacturing small steel products such as door hinges initially. 

Bhushan Power and steel had its business confined to a few customers. However, as demand spearheaded in the right direction, they expanded their region under business.

They established units in Chandigarh, Kolkata, Derabassi and Odisha to support their demand requirements. However, their Head Office remained in New Delhi. By FY 2014, they made an annual turnover of 11,288 crores. 

Bhushan Power and steel's profits climbed from 711 crores in 2010 to 1814 crore in 2014. Their earnings per share increased from 19 to 33 in the 4 years. The company, in short, was in the feat of success, making huge sums. 

Start of trouble

Have you heard the story of the goose which laid golden eggs? The story describes how the goose's owner, out of greed, cut the goose to get more gold.

Bhushan Power and Steel has a similar story. While it was laying golden eggs, the greed of its promoter led the company straight to its doom. Ultimately, Sanjay Singal was not only brought under the notice of law but also lost his most prized possession, BPSL.

Between 2007 and 2014, Bhushan Power and Steel Limited (BPSL), via its directors, got huge loans. The company borrowed all these credits to meet working capital requirements, purchase of plant and machinery, and other expansion related activities. In the end, the company availed credit from 33 banks and other institutions. As a result, the total sum stood at 47,204 crores. 

While the company saw good growth and fairly reasonable profits, they continuously skipped payment deadlines. Later on, it was revealed that the money was siphoned and diverted to 200 shell companies. Further, various assets were also brought illegally.

But the books were manipulated brilliantly by the mastermind and CMD of the company Sanjay Singal. This was all managed so perfectly that even the big banks failed to notice. BPSL's books showed as if these funds were being infused into the company itself by the introduction of fresh equity. And, thus, Sanjay Singal made everybody believe that all the borrowed funds were being used for the well-being of the company.

However, the truth could not be buried for too long. It soon hit the light of the day when the Punjab National Bank (PNB) moved it for solvency, demanding the payment of dues and the borrowed sum. 

Bhushan Power and Steel had availed credit of Rs 4423 crores from PNB. Following the suit put forth by PNB, other lenders were also exposed to reality, and they went on to join the suit. It included banks such as Bank of India, State bank of India, and Bank of Baroda. 

The table below shows some of the major borrowings of Bhushan Power and Steel Ltd,


Amount (in crores)



State bank of India 


Bank of India


Bank of Baroda


The company was soon under the radar of the Enforcement Directorate (ED), and a charge sheet was filed. The action was taken against its promoter Sanjay Singal under the Prevention of Money Laundering Act (PMLA).

Along with him, a few others were taken into custody, including certain bank officials for their part in the money laundering and its illegal diversion. Soon, Bhushan Power and Steel Limited were declared insolvent, and a bid requesting a proposal for the same was invited by the National Company Law Tribunal (NCLAT).

Series of problems

The NCLAT was happy with the bid of JSW Steel, who was also the highest bidder for the BPSL case. The Committee of Creditors (CoC) was also content with a 19,700 crore repayment proposal while taking a haircut of approximately 60% of their original loan amount.

Everything seemed to finally be on the right path. But the sun seemed to shine only for a short time. While the Committee of Creditors left a sigh of relief, everyone failed to notice the problem that was ahead of them.

As mentioned earlier, while the insolvency process was going on, the ED, on the other hand, was determined in finding out the truth behind the money laundering case.

The ED filed an opposition in the court for offering Bhushan Power and Steel Limited (BPSL) to JSW, stating that its promoters were associated with that of the BPSL's promoters. ED also put forth evidence stating that BPSL and JSW Steel are related entities and both were engaged in a joint venture.

Further, it also argued that section 32A of the IBC could not be provided to BPSL. For those who are puzzled by what Section 32A is, it is a provision which offers protection to corporate debtors against any prosecution or attachment of assets if a resolution is approved of.

Revival and Plans of Bhushan Power and Steel

However, at the end of the day, the rulings were made in favour of JSW Steel Limited. This was a result of a request made by CoC to speed the process and also offered immunity against all the criminal proceedings stating that the acts of an individual should not be applied upon the company.

Following the acquisition, JSW will be the go-forward to become India's largest steel producer. Further, with steel demand coming back onto the track, we can expect the business to travel along good lines as well.


In the end, 'all's well that ends well'.

After a series of trouble and mishappenings, Bhushan Power and Steel Limited is all set to get the business going, even though under a completely new entity. However, questions pertaining to an uncertain future, still remain.

How will it perform? What are the various prospects waiting for it? All these questions can be answered only as time goes.

comment on this article
share this article
Photo of Deb P Samaddar

An Article By -

Deb P Samaddar

265 Posts


481 Post Likes


If people could be named after idioms, Deb would be called "I'm all ears." His brain is a storehouse, ever overflowing with derelict information. So, while most things he talks about are as useless as occasion-less greeting cards, everything he writes has the potential of bagging you multiple diplomas!

Topics under this Article

Share your thoughts

We showed you ours, now you show us yours (opinions 😉)

no comments on this article yet

Why not start a conversation?

Looks like nobody has said anything yet. Would you take this as an opportunity to start a discussion or a chat fight may be.

Under Brand Games

"A few" articles ain't enough! Explore more under this category.

Share this post
share on facebook


share on twitter


share on whatsapp


share on linkedin


Or copy the link to this post -

copy url to this post