Despite having a strong thrust in the power generation sector, Jaiprakash Group has decided to play safe.
Burdened by an astronomical debt, of more than INR 75 Billion, which has raised many a eyebrow in the the financial sector, the group has been guided to reduce it’s debt burdon to improve the ratios in it’s financial statements.
The group’s financial woes have been compounded by the slowdown in the realty market in the recent years. A slowdown which is not expected to ease off for atleast another couple of years, or more.
Power and infrastructure, by their nature have a very long gestation period, and are dependent on large sums of debt to implement them, and to bring them to financial viability.
In line with this exercise, the group is divesting it’s stake in it’s flagship Bina Power Plant in M.P., India to JSW Energy Ltd of Sajjan Jindal for INR 35 Billion.
This news has been endorsed enthusiastically by the bourses, as the shares of both the companies rose sharply the moment the deal was announced.
