Jai Corp shares plunge 10%, down over 35% in 5 days – Know Why

Shares of Jai Corp continued their decline on January 3, falling over 10% intraday, bringing the total fall in five days to more than 35%. This sharp drop comes amid investor concerns following announcements related to its stake in Urban Infrastructure Holdings Pvt. Ltd. (UIHPL), signaling potential financial uncertainties.

Key Factors Behind the Decline

1. UIHPL Capital Reduction Proposal:
   • UIHPL, in which Jai Corp holds a 32% stake, has proposed a reduction of 99.76% of its share capital, including equity shares and fully compulsorily convertible preference shares (CCPS). This plan aims to distribute approximately ₹3,746.87 crore to shareholders proportionately, subject to shareholder and regulatory approvals.
   • Jai Corp expects to receive ₹364 crore from this transaction.
2. Stake Sale and Fund Distribution:
   • Earlier, Dronagiri Infrastructure Private Limited (DIPL), a subsidiary of UIHPL, sold a 74% equity stake in Navi Mumbai IIA Private Limited for ₹1,628.03 crore to Reliance Industries. Following the sale, DIPL proposed a capital reduction, stating it had excess funds.
   • DIPL has already returned ₹1,597 crore of the promoter’s equity contribution to UIHPL, further adding to the funds available for distribution.
3. Buyback Program and Promoter Holding:
   • In September 2024, Jai Corp completed a buyback of 2.94 million shares at ₹400 per share, which reduced the promoter and promoter group’s stake by 1.09%.

Jai Corp Share Price history