NCLT orders liquidation of Hero Electric Vehicles after creditors reject resolution plans

Core Insights - The National Company Law Tribunal (NCLT) ordered the immediate liquidation of Hero Electric Vehicles Pvt Ltd due to the failure to secure the required 66 percent approval from the Committee of Creditors (CoC) during the Corporate Insolvency Resolution Process (CIRP) [8][10] - The liquidation order was issued on 3 March 2026, following the expiry of the CIRP on 13 February 2026, after multiple attempts to revive the company failed [8][10] - The case highlights significant challenges in India's electric two-wheeler sector, including over-leverage, subsidy delays, and battery supply issues, which are critical to achieving India's 2030 electrification goals [7][10] Company Overview - Hero Electric Vehicles Pvt Ltd entered the CIRP on 20 December 2024, initiated by an operational creditor, Metro Tyres Ltd, under Section 9 of the Insolvency and Bankruptcy Code (IBC) [8] - The reconstituted CoC included key lenders such as Bank of Baroda with a secured claim of ₹55.35 crore (39.70 percent voting share), South Indian Bank with ₹17.62 crore (12.64 percent), and IDFC First Bank with a 6.76 percent share [8][10] Resolution Attempts - Over 16 CoC meetings were held, during which the Resolution Professional (RP) conducted two rounds of Expressions of Interest and received multiple resolution plans, but none secured the necessary creditor approval [2][8] - Initial plans were proposed in May 2025, but the CoC annulled the process and sought extensions, leading to further viable plans by August 2025, which also failed to gain approval [3][8] Liquidation Process - NCLT appointed Lekhraj Bajaj as Liquidator, transferring all records and relieving the previous RP, with a fresh moratorium under Section 33(5) barring suits against the estate [5][10] - The Liquidator is required to issue a 75-day preliminary report and investigate affairs under Section 35(1), while fees will follow IBBI scales prioritizing the liquidation estate [6][10] Industry Implications - The liquidation of Hero Electric Vehicles Pvt Ltd is part of a broader trend of insolvencies in the electric vehicle sector, raising concerns about the sustainability of companies in this market [7][10] - Stakeholders are closely monitoring whether the liquidation process will yield fair value or simply accelerate consolidation within the industry [7][10]