Stock under Rs 20 jumps 10% after NCLT approves resolution plan

On Thursday, the share price of Jaiprakash Power Ventures rallied 10.67 per cent after developments related to Jaiprakash Associates’ insolvency resolution process. The National Company Law Tribunal (NCLT), Allahabad Bench, orally approved the resolution plan submitted by Adani Enterprises Ltd under the Insolvency and Bankruptcy Code, 2016. As of March 19 the share price of JP  Power is trading at Rs 16.6.

NCLT approves resolution plan for Jaiprakash Associates

According to the company’s disclosure, the approval marks an important step in the corporate insolvency resolution process of Jaiprakash Associates. As part of the approved resolution plan, the securities of the company will be delisted from the stock exchanges in accordance with applicable regulations. The successful resolution applicant has assessed that the liquidation value of the company is insufficient to fully meet the claims of secured creditors.

As a result, no consideration will be offered to existing shareholders as part of the delisting process. The exit price for shareholders has therefore been set at nil. In addition, the entire pre-CIRP share capital of Jaiprakash Associates, including equity shares, preference shares and other related instruments, will be cancelled and extinguished on the effective date. This date will fall within 90 days from the approval of the resolution plan by the tribunal.

The company noted that the disclosure is based on the oral pronouncement of the tribunal’s order. A more detailed update will be issued once the written order becomes available.

Jaiprakash Associates Holding in Jaiprakash Power Ventures

According to the latest shareholding disclosures, Jaiprakash Associates holds approximately 1,64,48,30,118 equity shares in Jaiprakash Power Ventures. With the stock price increasing by roughly Rs 1.46 - Rs 1.47 per share in early trading, the value of Jaiprakash Associates’ stake rose by around Rs 240 crore in a single session.

About Jaiprakash Power Ventures

Jaiprakash Power Ventures Ltd is engaged in the business of power generation, including thermal and hydroelectric power. The company operates power plants across multiple locations in India and also has interests in coal mining and cement grinding units. It supplies electricity to state utilities and other customers, with a focus on long-term power purchase agreements. The company is part of the Jaypee Group and has been involved in infrastructure and energy projects across the country.

The company has a market capitalisation of Rs 11,377 crore. It reported a Return on Capital Employed (ROCE) of 10.3 per cent and a Return on Equity (ROE) of 6.85 per cent. Over the past five years, the company has delivered a net profit CAGR of 20.0 per cent.

Disclaimer: The article is for informational purposes only and not investment advice