Jaiprakash Associates pares early gains; stock down 8.5%

Shares of Jaiprakash Associates pared early gains and went into a tailspin, falling 8.5 per cent, in-tandem with a weak stock market trend.
The stock slumped 8.17 per cent to settle at Rs 10.23 on BSE. During the day, it had gained 5.11 per cent to Rs 11.71 after the debt-laden JP Group said its shareholders have approved the company's proposal to convert its debt into equity.
At NSE, shares of the company tanked 8.52 per cent to close at Rs 10.20.
In terms of volume, 113.34 lakh shares of the company were traded on BSE and over 8 crore shares changed hands at NSE during the day.

Stock market benchmark Sensex came under severe selling pressure during the afternoon trade and plunged 465.28 points or 1.64 per cent to 27,827.53 at close.
Shareholders of Jaiprakash Associates (JAL) yesterday approved the "option to convert loans, debentures or other borrowings/debt of the company into equity shares/securities of the company," it said in a regulatory filing.

Explaining the rationale behind the move, JAL in a filing had earlier said that recessionary trend in construction/ infrastructure sectors during last few years coupled with setbacks in timely monetisation of some of the assets of the company resulted in cash flow mismatch leading to some delays in honouring debt obligations.

"The lenders may consider an option to convert their loan/credit facilities (including unpaid interest) in full or part thereof, into equity shares/securities of the company...," it had said.
In last few months, JAL has informed exchanges that it has failed to meet its debt and interest payment commitments.