Cement, power, real estate and construction player Jaiprakash Associates is implementing the 1000 km-long Ganga expressway, connecting Greater Noida to Ballia in UP, on a BOT basis. The project will require an investment of over Rs 6,000 crore but is expected to give the company a land bank of over 6,000 acres along the expressway.
It is doing it through its subsidiary Jaypee Infratech.
Jaiprakash Gaur's flagship company, Jaiprakash Associates was allotted the Noida-Agra ‘Taj Expressway’ project by Mayawati in her last tenure. The Mulayam Singh government had stalled the project soon after it came to power. Gaur is known to enjoy a comfortable relationship with Mayawati.
Gaur ranks 664 on list of The World's Billionaires 2007. He was ranked 30 among India's 40 Richest in 2006. Gaur founded his company in 1972. He believes that water is liquid gold.
Jaiprakash Associates Ltd. was the lowest bidder for the Rs 40000 crore Ganga Expressway, the 8-lane road project on the banks of river Ganga to connect eastern and western Uttar Pradesh. Jaiprakash Associates was followed by Reliance Energy. The others like Gammon India , Unitech and Zoom Developers were far behind.
On her pet project-Ganga Expressway- Mayawati was asked if the project had already been awarded to Jaiprakash Associates. She said only barren and non farmland would be acquired for the project.
Jaiprakash Associates, Gammon India, Unitech, a consortium led by Zoom Developers, and a consortium led by Reliance Energy are in the race for the project.
In the meanwhile, the move to include Jaiprakash Associates (JPA) in the Sensex has baffled quite a few market watchers. The stock was in the midst of a controversy just a few weeks back.
Irate fund managers pummelled the stock on lack of clarity regarding the company’s stake holding in its unlisted subsidiary Jaypee Infratech (JIL). Somehow, these fund managers got an impression that JPA’s holding in the subsidiary had fallen to 55% from 100% earlier.
Subsequently JPA executive chairman, Manoj Gaur clarified that the company held 100% in JIL and that there was no dilution. But the sagging stock price of JPA seems to indicate that minority shareholders are not convinced, despite a couple of rosy reports from leading brokerage houses giving the management a clean chit.
The stock price is down 28% over the last one month, and has more than halved from its highs in January. Also, market watchers point that both cement and construction — the two major business segments of JPA — are more than adequately represented in the Sensex.
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