IL&FS, which has been in debt resolution since its 2018 crisis, aims to use the proceeds from the sale to repay outstanding debts totaling around Rs 1,000 crore. However, the transaction faced delays as IOC has yet to provide the necessary waiver for the sale, given an existing contract that required IL&FS to retain at least 51% ownership of IPRWL until 2039.

The IPRWL project, which provides treated water to IOC’s Paradip refinery in Odisha, was initially governed by an agreement that gives IOC a first right of refusal for any stake sale.

In a related ruling, the NCLAT also affirmed that IL&FS lenders could not claim payments beyond the debt cut-off date of October 15, 2018. This includes interest on debts, and the decision ensures consistency in the restructuring process.