Jaiprakash Associates stock falls the most in one day in 5-1/2 yrs

Reuters Market Eye - Shares in Jaiprakash Associates Ltd slump as much as 19.5 percent.

Heads towards biggest single-day fall since January 2009.

Traders cite speculation that promoters are reducing their stakes.

Jaiprakash clarifies in a statement that one of its promoters reduced its stake in the company to 28.30 percent from 29.75 percent.

The engineering and construction firm attributes the sale to meet fund requirements, including for a "social cause."

Traders say the shares are also typically vulnerable to falls because of concerns about the company's debt levels.

The company has a net debt of 631.11 billion rupees ($10.44 billion) and a debt-to-equity ratio of nearly 6 times, Thomson Reuters data shows.

 

(Reporting by Dipika Lalwani)