JP Associates Shares Tanked 20% As Jaypee Infra Sells 1.3 Crore Shares

Shares of JP Associates tanked 20% in intraday trade on Thursday on concerns over the promoters selling stake. Jaypee Infra Ventures sold almost 3.3 crore shares or 1.45% equity shares via the open market in the last three days.

As per data available on the stock exchanges, Jaypee Infra Ventures sold 1,34,89,693 shares of Jaiprakash Associates for Rs 62.40 crore through open market sale route.

‘Rumours are being planted in the market by the persons with vested interests suggesting that the promoters are selling their shareholding in the company.’ the company said in a statement to the exchange.

The company also clarified, “In the interest of stakeholders that one of the promoters holding 72.36 crore shares, constituting 29.75% of the company's shares capital, has sold only 1.45% of such share holding and continues to hold 68.83 crore shares, constituting 28.30% of the company's share capital. This small share holding has been disposed off by the promoter company to meet its requirement of funds including for social cause.” in their statement.

The Jaypee Group is selling most of its cement assets to reduce its debt of Rs 60000 crore. In September 2013, Jaypee sold its Gujarat cement plant to UltraTech Cement for Rs 3800 crore. In March, Jaypee sold its 74% stake in a cement joint venture with Steel Authority of India (SAIL) in Jharkand to Dalmia Bharat for about Rs 690 crore. One week ago, 1.5 million tonnes (mt) cement grinding unit was sold to Shree Cement at Rs 360 crore.

Therefore, the company may try to reduce its debt level by selling its stake which is one of the probabilities. So, we suggest waiting for more correction in the stock.

Stock closed at Rs 37.70, lower by 17.60%.