While the market turned bullish today after the Uttar Pradesh election success for India's ruling party, some company shares moved in the opposite direction. One of these was Jaiprakash Power Ventures (JP Power), the struggling power company that crossed below its 30 day SMA today, losing nearly 4% of its stock price at markets' close.
What is ailing JP Power? Multiple issues. The electric utilities space is a capital-heavy industry, and for a company this deeply in the red, recovery is tough going. The firm, which is under the debt-ridden infrastructure conglomerate Jaypee Group, recently allotted Rs. 305.8 crore worth of shares to its lenders, to reduce its debt.
The single-digit share price however, points to the continuing woes of the firm, which has seen double-digit falls in revenues and net profits in its recent quarters - the last profit-positive quarter for JP Power was September 2015. The company's major lenders include ICICI Bank, IDBI Bank and Punjab National Bank, all of which have received shares in a company whose share price continues to fall, and fall sharply. Promoters have pledged 83.3% of their holdings to meet the company's obligations.