JP Associates tanks close to 6% after RBI seeks SC nod for insolvency proceedings

Shares of Jaiprakash Associates fell 5.72 percent intraday on Tuesday hitting a low of Rs 22.85 per share after the Reserve Bank of India (RBI) seeks Supreme Court nod to begin insolvency proceedings against the company.

The move had more than 25,000 homebuyers of Jaypee Infratech in Noida and Greater Noida worried that if insolvency proceedings against JAL are allowed, who will deposit Rs 2,000 crore with the Supreme Court registry and ensure that homebuyers are refunded from the amount, sources told Moneycontrol.

Jaiprakash Associates, with a debt of nearly Rs 29,000 crore, is part of Jaypee Group, promoted by Manoj Gaur and his family and features in RBI’s second list of 28-30 companies to be taken to NCLT. It has deposited Rs 425 crore so far. Besides, JAL is yet to deposit the full amount of Rs 2,000 crore with the Supreme Court registry.

In order to avoid legal complications, the RBI had reportedly asked the lead banker, ICICI Bank last week to exempt Jaiprakash Associates from being filed at the NCLT for now, banking sources aware of the matter had said.