Jai Corp Ltd shares dived 19 per cent in Thursday's trade after the company informed stock exchanges that Urban Infrastructure Holdings Private Limited (UIHPL), in which the company owned 32 per cent equity stake, is looking for a capital reduction proposal and has sought for convening an extra ordinary general meeting (EGM) regarding the same.
"The proposed capital reduction is subject to approval by the shareholders of UIHPL, the NCLT and requisite regulatory approvals, if any. Upon sanction of such capital reduction, the company will receive Rs 364 crore approximately upon sanction of such capital," Jai Corp said.
This is after Dronagiri Infrastructure Private Limited, a subsidiary of UIHPL, sold 74 per cent equity stake in Navi Mumbai IIA Private Limited for a consideration of Rs 1,628.03 crore. CIDCO retained its remaining 26 per cent stake.
To recall, Reliance Industries Ltd (RIL) had a couple of weeks ago announced the acquisition of a 74 per cent equity stake in Navi Mumbai IIA Private Limited. The deal was approved by the RIL board on December 11, 2024, after CIDCO waived its rights of first refusal on December 12, 2024.
An NDTV report suggested that it was Maharashtra’s biggest industrial land parcel of over 5,286 acres and that it was sold at a valuation of just Rs 2,200 crore.
Jai Corp shares plunged 18.55 per cent to hit a low of Rs 252.35 on BSE. It fell 5.20 per cent on Wednesday and 2.46 per cent on Tuesday. Jai Corp said its arm UIHPL has received a notice convening an EGM of the members of DIPL, proposing reduction of its equity share capital, since DIPL has funds in excess of its wants.
"Upon such reduction, UIHPL will receive a minimum amount of Rs 1,492.50 crore from DIPL as consideration for the DIPL Capital Reduction. As per the DIPL EGM Notice, this amount may increase depending on interest which may be earned by DIPL on the surplus cash available with it and which may also be distributed by DIPL as consideration for DIPL Capital Reduction. Further, UIHPL has already received back the promoter’s contribution towards equity to subsidiary company of Rs. 1,597 crore from DIPL," it said.
Further, UIHPL will also receive Rs 682 crore on redemption of optionally fully convertible debentures held by it in Vinamra Universal Traders Private Limited. Thus, the total funds with UIHPL will be a minimum of Rs 3,772 crore.
"The board of UIHPL proposes to reduce 99.76 per cent of its share capital (i.e. equity shares and fully compulsorily convertible preference shares (“CCPS”) on a proportionate basis, and pay an aggregate consideration of Rs 3,746.87 crore to its shareholders towards such capital reduction (on a proportionate basis and considering CCPS on as is converted basis)," it said.
"It is further proposed to increase the consideration payable on the capital reduction in a manner that the Company is left with a cash balance which is necessary for its day-to-day functioning and such additional consideration will also be paid on a proportionate basis," Jai Corp said.