JP Associates has good support around Rs 70, says SP Tulsian, sptulsian.com.
Tulsian told CNBC-TV18, “Jaiprakash Associates, when the management came in the middle of December he has clearly hinted that maybe by year end because when Udayan asked him he said that maybe around Christmas or maybe around year end they will be able to conclude the deal for sell of their 4.8 million tonne plant, that is the Gujarat Cement plant. At that time there was active news that UltraTech Cement is looking to acquire that project but that did not happen. In the interim we have seen the qualified institutional placement (QIP) having made by the company which itself is seen very bad because QIP per se may not be taken as bad but if the company is making at a distress valuation properly that indicates the liquidity crunch at the end of the company and they are prepared dilute the equity even at lower valuations.”
He further added, “In anticipation of the positive news ahead of the sell of the cement plant lot of trading positions, lot of longs have seen built-up in the stock and that seems to be now, they all seem to be exiting. But the stock even in case of JP Associates, the stock seems to be bottoming out maybe a level of Rs 70 looks to be a good support and if we get to hear anything happening on the cement plant sell front of 4.8 million tonne that can again revive interest in the stock but the prime reason for the correction has been those two news events.”