One of the pioneers of the data centre business in India is now betting on the besieged Indian power sector.

A group of professionals led by Sharad Sanghi, who sold his company Netmagic to Japan’s telecoms major NTT Communication five years ago, has emerged as the sole bidder to acquire Jyoti Structures, the first among the 12 companies referred by the central bank under India’s new Insolvency and Bankruptcy Code.

Sanghi is likely to be backed by a motley of ultra-high-net-worth professionals like private equity executive Manish Kejriwal and ace stock market investor Madhu Kela, who till recently was part of the Anil Ambani Group, said multiple sources aware of the matter.

Mumbai-based Jyoti Structures is a mid-size company, specialising in power transmission, distribution and EPC (engineering, procurement and construction) projects. The promoters, Thankur, Valecha and Mirchandani families have just an 18.2% stake in it as of end-September.

Kejriwal, a former India head at Temasek, currently runs Kedaara Capital. Jyoti Structures will be a personal investment for him if the deal goes through.

Saghi has also been an investor backing emerging companies. In an earlier interaction, he had said that after Netmagic his aim would be to mentor and add value to businesses.

It’s not known whether he has identified or hired anyone to lead the management of Jyoti Structures if he indeed acquires it.

“Sanghi is taking to a group of investors. The consortium is not yet finalised entirely,” said a banking source.

Mails sent to Sanghi went unanswered, while Kejriwal and Kela were unavailable for comment until press time Thursday.

Despite the initial expression of interest from multiple suitors, including by the Shapoorji Pallonji Group, Kalpataru Power Transmission and RPG Group’s KEC International, only one resolution plan was eventually submitted on the last day for submission earlier this week, the sources mentioned above said.

In July, the National Company Law Tribunal (NCLT) approved bankruptcy proceedings against Jyoti Structures on a petition by its lead lender, State Bank of India. According to NCLT filings, the company had total debt of Rs7,000 crore.

The NCLT has appointed an interim resolution professional (IRP) from BDO India to administer the company and prepare a resolution plan. In August, the IRP invited expressions of interest from potential buyers for the stake.

Jyoti is among power sector firms that are hit by a lack of fuel linkages or troubles in completing land acquisition. Lenders invoked RBI’s strategic debt restructuring rules on the company in 2015, but restructured its debt outside the provisions. Since then, banks have been trying to sell their 51% stake in the company with no success.

In 2013, AION Capital Partners had invested close to Rs 300 crore through structured credit in Jyoti Americas, the company’s US unit, renewing hopes of its revival.

There were expectations that reforms in the power sector would trigger significant, predictable growth with an expected capex of $90 billion over five years. The sector was also witnessing a moderation of competition as many new entrants have withdrawn from it. A player like Jyoti Structures was well entrenched to capitalise given its track record and technical abilities.

But in the past few years, the company has been grappling with problems like delayed payments after execution of orders. Its entry into the US did not work out either, leading to continued losses since 2014. Interest costs shot up five times in as many years, triggering a default.

“Sanghi created a great company and created enormous value for his shareholders after selling Netmagic. So liquidity is available to him. This could be a high risk high rewards bet,” said a person familiar with his plans. “There are still sectoral imponderables like the receivables and the sanctity of the existing contracts. They hold the key.”

Sanghi sold 74% of NetMagic in 2012 for Rs 900 crore, but has still been running the company in India, even with NTT hiking its stake further. Earlier this year, there were reports that he would exit completely. With his bid going in for Jyoti, speculation has once against surfaced about that transaction.

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