Hero Electric is headed for liquidation after the Committee of Creditors (CoC) failed to achieve the mandatory 66 percent majority required to approve a resolution plan under the Insolvency and Bankruptcy Code. The company's insolvency journey began on December 20, 2024, following an application by operational creditor Metro Tyres Limited.
- CoC deadlocked at 50-50 split between resolution and liquidation
- Admitted claims total over Rs 150 crore across multiple creditors
- Fraud investigation pending over allegedly avoidable transactions
Hero Electric liquidation details
Creditor deadlock triggers liquidation
Despite attracting nine expressions of interest during the Corporate Insolvency Resolution Process, the case ultimately collapsed due to the CoC's inability to reach consensus. The highest-voted resolution plan secured only 47.66 percent support, falling well short of the 66 percent threshold. By the final hearings, approximately 50 percent of the voting share favoured a resolution plan, while the remaining members pushed for immediate liquidation. With the statutory CIRP period having expired on February 13, 2026, the National Company Law Tribunal ruled that further continuation of the process would serve no useful purpose and only erode the company's value.
The liquidation process will attempt to recover dues for secured and unsecured financial creditors. Major admitted claims include Bank of Baroda (Rs 55.36 crore), SLK Software (Rs 47.87 crore), South Indian Bank (Rs 17.62 crore), IDFC First Bank (Rs 9.43 crore) and Karnation Fund/Mitcon (Rs 8.61 crore).
Adding complexity to the liquidation is a pending application regarding allegedly fraudulent transactions. Acting on a report from transaction auditor JTST & Co. LLP, the Resolution Professional identified certain transactions as avoidable or fraudulent under Section 66(1) of the Code. The NCLT noted that this application remains pending adjudication, and the incoming liquidator will be required to pursue it alongside other recovery proceedings.
Hero Electric had earlier faced allegations of non-compliance with the Phased Manufacturing Programme localisation norms under the FAME II scheme. The Ministry of Heavy Industries reportedly issued a demand notice requiring Hero Electric to refund Rs 133 crore in subsidies, citing PMP violations, though the company disputed the demand. Hero Electric had separately claimed that the government owed it Rs 556 crore in pending subsidies.
The NCLT has appointed Lekhraj Bajaj as the Liquidator, who has been directed to take immediate control of the company's records and assets. The powers of Hero Electric's Board of Directors have ceased, vesting entirely in the liquidator.
Shahkar Abidi
Dipan Sur
Dhruv Dhaka
Saptarshi Mondal
Suraj Viswanathan
Anurag Chaturvedi
