Jai Corp Shares Ends Nearly 20% Lower After Selling Land Parcel To Reliance Industries

Shares of Jai Corp. tumbled nearly 20% on Thursday after an industrial land parcel of over 5,286 acres was sold to Reliance Industries Ltd. at a valuation of Rs 2,200 crore.

Urban Infrastructure Holdings Pvt. Ltd., a company in which Jai Corp holds 32%, convened an extraordinary general meeting of shareholders to approve the capital reduction.

The unit of Urban Infrastructure Holdings sold its 74% stake in Navi Mumbai IIA Pvt. for Rs 1,628.03 crore, valuing the company at Rs 2,200 crore to Reliance Industries Ltd.

The appreciation potential of the land parcel exceeds the acquisition cost.

Reliance Industries Ltd., in its statement, said that the investment is not a related party transaction and none of the company’s promoters, promoter group, or group companies have any interest in the above transaction. Subsequent to the acquisition, Navi Mumbai became a 74% subsidiary of the Mukesh Ambani-owned conglomerate.

Navi Mumbai IIA was incorporated on June 15, 2004, and is engaged in developing the Integrated Industrial Area in Maharashtra. The company in the financial year ending March 2018 was allowed by the Maharashtra government to be converted from SEZ into an Integrated Industrial Area (IIA).

Jai Corp's stock closed 19.99% lower at Rs 248.4 apiece on the NSE, compared to a 1.88% advance in the benchmark Nifty 50.

The stock has fallen nearly 38% during the last 12 months.