Jaiprakash Power shares soar in fag-end trade amid heavy volumes; what analysts say

Shares of Jaiprakash Power Ventures Ltd (JP Power) surged in Friday's fag-end trade, rising as much as 13.55 per cent to hit an intraday high of Rs 20.36 amid strong buying interest and heavy trading volumes. The stock was last seen trading 9.20 per cent higher at Rs 19.58.

The sharp move came alongside robust activity on the counter, with around 5.06 crore shares changing hands on BSE -- significantly higher than the two-week average volume of 1.17 crore shares. Turnover stood at Rs 98.60 crore, while the company's market capitalisation (m-cap) was at Rs 13,014.72 crore.

The rally followed recent developments in the insolvency proceedings involving debt-ridden Jaiprakash Associates Ltd (JAL), the flagship company of the Jaypee Group and a key promoter entity holding around 24 per cent stake in JP Power.

The National Company Law Appellate Tribunal (NCLAT) dismissed appeals filed by Vedanta Ltd challenging the selection of Adani Enterprises Ltd as the successful bidder for JAL under the insolvency resolution process.

Earlier, the National Company Law Tribunal (NCLT) had approved Adani Enterprises' Rs 14,535 crore resolution plan to acquire JAL through the Corporate Insolvency Resolution Process (CIRP).

In November last year, the Committee of Creditors (CoC) had approved Gautam Adani-led Adani Enterprises' bid for the bankrupt infrastructure group. The Adani Group flagship outbid Vedanta and Dalmia Bharat to secure the acquisition.

"The COC of JAL, a company undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code 2016 (IBC), has approved the resolution plan submitted by Adani Enterprises," the company had earlier stated in an exchange filing.

Adani Enterprises received the highest support from creditors with nearly 89 per cent votes, ahead of Dalmia Cement (Bharat) and Vedanta Group.

JAL was admitted into CIRP in June last year after defaulting on loan repayments aggregating Rs 57,185 crore.

The company owns a diversified portfolio of assets spanning real estate, cement, hospitality, power, and engineering & construction businesses. Its marquee real estate assets include Jaypee Greens in Greater Noida, part of Jaypee Greens Wishtown in Noida, and Jaypee International Sports City near the upcoming Jewar International Airport.

JAL also owns commercial office spaces in Delhi-NCR, hotel properties across Delhi-NCR, Mussoorie and Agra, four cement plants in Madhya Pradesh and Uttar Pradesh, and leased limestone mines in Madhya Pradesh.

Additionally, it holds investments in subsidiaries and group entities, including JP Power, Yamuna Expressway Tolling Ltd and Jaypee Infrastructure Development Ltd.

Analyst view

According to AR Ramachandran, Sebi-registered research analyst at Tips2trades, "JP Power's stock is bullish on daily charts with strong support at Rs 17.4. A daily close above the resistance of Rs 20.4 could lead to an upside target of Rs 23 in the near term."

Ravi Singh, Chief Research Officer at Mastertrust, noted that the counter has potential to hit an upside target of Rs 21 in the near term.