Shares of Jaypee Group’s flagship Jaiprakash Associates (JP Associates) plunged 7 per cent on Monday amid heavy volumes after defaulting on loan payments. The stock dived 7.14 per cent to hit an intraday low of Rs 9.49 over its previous close of Rs 10.22. The scrip eventually settled 4.60 per cent lower at Rs 9.75.
The company defaulted on loans of Rs 4,059 crore, comprising both the principal and interest amount. In a filing to BSE, JP Associates said the company on December 31, 2022, defaulted on repayments of a principal amount of Rs 1,713 crore and interest of Rs 2,346 crore.
A total of 26.68 lakh shares changed hands on BSE, which was higher than JP Associates’ two-week average volume of 26.41 shares. The turnover on the counter stood at Rs 2.61 crore for the day. The company commanded a market capitalisation (m-cap) of Rs 2,393.23 crore at the close.
“The level of Rs 9.15 remains strong support. A daily close below this level could lead to Rs 8 in the near term,” said A R Ramachandran from Tips2trades. Strong resistance on the counter would be at Rs 10.2, Ramachandran added.
There were 3,27,195 buy orders today against sell orders of 1,57,838 shares. On NSE, 1.44 crore shares traded for a value of Rs 14.10 crore.
The stock traded higher than its 100- and 200-day moving averages, but lower than its 5-, 20-and 50-day moving averages. JP Associates has a one-year beta of 1.31, Trendlyne data showed, suggesting very high volatility on the counter.
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JP Associates’ 14-day relative strength index (RSI) came at 43.60. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a negative price-to-equity (P/E) ratio of 1.69.
Background
In September 2018, ICICI Bank filed an insolvency petition against JP Associates but the matter is still pending before the Allahabad bench of the National Company Law Tribunal (NCLT).
The country’s biggest lender SBI had in September this year moved the NCLT against JP Associates, claiming a total default of Rs 6,893.15 crore as on September 15, 2022.
Last month, JP Associates and its group firms announced the sale of its remaining cement assets to Dalmia Bharat Ltd at an enterprise value of Rs 5,666 crore and exit from the sector as part of its strategy to reduce debt.
Earlier, as part of its debt resolution exercise, JP Associates had sold more than 20 million tonnes per annum cement capacity to Aditya Birla group firm UltraTech Cement between 2014 and 2017.
In 2015, Jaypee group sold its controlling stake of more than 2 million tonnes of cement capacity to Dalmia Group.
(With inputs from PTI)
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