JP Associates

MUMBAI: Jaiprakash Associates would make a good case to understand how the market reacts to or reads into news or rumours and the current skittish state. Jaiprakash Associates Wednesday ended 12 per cent lower at Rs 265.25 on BSE due to confusion over the company's shareholding in the subsidiary which has bagged the Taj Expressway project. The confusion arose after a conference on Tuesday, where it was understood that Jaiprakash Associates will transfer 45 per cent stake in the Taj Expressway project to another company. In clarification the company today said JP Infratech continues to be a 100 per cent subsidiary of the group. There was a need to increase the authorised capital of JP Infratech from Rs 200 crore to Rs 1,000 crore and Jaiprakash Associates subscribed the additional 35 crore shares at Rs 10 each, which represented 55 per cent of the capital. Investors feel there is more to it than meets the eye. Market condition is such that they are trying to exit it. The company also clarified that it would go ahead with the initial public offering of its power subsidiary JP Power.
"The stock is in oversold territory and will take some time to recover. On the operational front, Jaiprakash Associates should be valued at Rs 410 a share.