Jaiprakash Associates tumbled 7.08% to Rs 39.40 at 13:49 IST on BSE on reports the deal between Jaypee Cement and UltraTech Cement for the former's plant in Gujarat has run into legal trouble.
Meanwhile, the BSE Sensex was down 539.17 points, or 2.61%, to 20,107.47.
On BSE, 28.89 lakh shares were traded in the counter compared with average volume of 44.83 lakh shares in the past one quarter.
The stock hit a high of Rs 42 and a low of Rs 38.80 so far during the day. The stock hit a 52-week high of Rs 106.75 on 12 December 2012. The stock hit a 52-week low of Rs 28.40 on 19 August 2013.
The stock had outperformed the market over the past one month till 19 September 2013, rising 37.66% compared with the Sensex's 12.78% rise. The scrip had, however, underperformed the market in past one quarter, falling 33.07% as against Sensex's 7.28% rise.
The mid-cap company has an equity capital of Rs 443.81 crore. Face value per share is Rs 2.
According to reports, the Gujarat High Court on Thursday, 19 September 2013, ordered the deal involving transfer of a cement plant in the Kutch from Jaypee Cement to UltraTech Cement would be subject to the outcome of a public interest litigation (PIL) filed by local villagers of Abdasa taluka in the region.
A division bench of Chief Justice Bhaskar Bhattacharya and judge J B Pardiwala has issued notices to the two companies and the Gujarat government. The next hearing is on 10 October 2013.
Reports added that the villagers in their suit have asked Jaypee to resolve the problems of encroachment and pollution before selling the unit. The suit was filed by Kharai Juth gram panchayat, where Jaypee's unit is located in the Abdasa taluka of Kutch. The PIL alleges Jaypee has encroached upon grazing land, water bodies and public roads.
The suit has asked the court to intervene to get the land freed and check pollution, caused mainly by mining and dumping of alkali dust. The conflict began when Jaypee laid off local labourers. In the suit, villagers have not only complained about encroachment and pollution but also raised questions on the transfer of the lease land, reports added.
On 11 September 2013, Jaiprakash Associates announced that its wholly-owned subsidiary, Jaypee Cement Corporation (JCCL), reached an agreement to sell its 4.8 million tonnes per annum (MTPA) Gujarat Cement Plant to UltraTech Cement for an enterprise value of Rs 3800 crore, besides the actual net working capital. Gujarat Cement Project consists of an integrated cement plant at Kutch and a 2.4 MTPA cement grinding unit at Wanakbori.
The proposed transaction is subject to the approval of shareholders and creditors, sanction of the Scheme of Arrangement by the High Courts, approval of the Competition Commission of India and all other statutory approvals. Jaiprakash Associates said it anticipates the transaction to close in 7 to 9 months.
Over the past decade, Jaiprakash Associates increased its cement capacity from 4.40 MT in 2002 to 36.8 MT, and post this deal will continue to remain the third largest cement manufacturer in the country, the company said.
Jaiprakash Associates' net profit surged 140.9% to Rs 334.51 crore on 10.8% growth in net sales to Rs 3283.26 crore in Q1 June 2013 over Q1 June 2012.
Jaiprakash Associates is a diversified company with business interest in construction, power, cement, real estate and hospitality.
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