JP Associates may move to Rs 85: SP Tulsian

Once the short covering or maybe the informed buying comes in, we may see JP Associates moving back to about Rs 84-85 in the near-term, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “JP Associates news was very much there in the pipeline, it was only a matter of time because firstly the deal has happened because the two companies, the total 9.5 million has been hived off, half of close to 5 million tonne of Gujarat, 5 million tonne of Andhra Pradesh and market was expecting that probably the entire deal of 9.5 million tonne will happen but that has not happened. It has only happened in respect to about 4.8 million tonne of about two plants at Gujarat.”
He further added, “In the Gujarat also if you see the 51% stake has been acquired by the Irish company with an option to retain 50%. So the quantum which was earlier expected to come in close to about Rs 7,500-8,500 crore for the entire hived off company, which the company has done couple of months back, that has not happened. So there maybe a little disappointment there that the quantum of the amount which company will be getting is too less against the total debt position of maybe Rs 43,000-44,000 crore and the company now getting Rs 2,000 crore if they would have got the entire deal executed for the Andhra as well as Gujarat, probably they would have got as I said Rs 7,500-8,000 crore, that would have cheered the market.”
“I am quite positive because largely because of the JP Infra having become operational, the real estate monetizations or the profits from the real estate development in that company will flow in at a bigger pace. Since this company is a holding company of JP Infra, they will stand to gain quite a lot. So I am keeping my positive stance on the stock, I don’t see that the stock is likely to correct below Rs 72 and maybe once the short covering or maybe the informed buying comes in, we may see stock quickly moving back to about Rs 84-85 in the near-term.”