The stock of JP Associates on Tuesday gained 4.5 per cent after news that the company has received environment clearance. The stock ended the day at Rs 101.70 on the BSE. The stock surged above Rs 100-mark for the first time since April 2011. A total of 36-lakh shares were traded on the BSE compared to the two-week average of 21 lakh shares.
The company informed the exchanges that it had received second and final stage of clearance for coal mining at the Amelia (North) Coal Block in Sidhi District of Madhya Pradesh. The company is expected to start production by January 2013. While most brokerages have maintained a ‘buy’ call, others are concerned that the company is highly leveraged for this to be good news for the investors.
Edelweiss, which maintains a ‘buy’ with a price target of Rs 147 on Jaiprakash Associates said: “This development is in line with management’s guidance for a December-January forest clearance for the coal block.”