Mumbai: Shares of Jaiprakash Power Ventures (JP Power) witnessed a sharp reversal on Friday, November 21, tumbling up to 8.5 percent to Rs 19.79 on the BSE. The decline came after the stock rallied nearly 29 percent over the previous two sessions. The surge was fueled by market enthusiasm surrounding the Adani Group’s successful bid for Jaiprakash Associates (JAL), a development viewed as a potential value unlock for JP Power.
Why the Market Turned Cautious
The enthusiasm stemmed from Adani securing creditor approval for its Rs 14,535-crore acquisition proposal for the bankrupt JAL. Since JAL holds about a 24 percent stake in JP Power, investors anticipated that a strong sponsor like Adani could improve prospects for JP Power’s operations and financial stability. This triggered aggressive buying in the small-cap counter earlier in the week.
However, Friday’s sell-off reflected a shift in short-term market psychology. With the stock running ahead of its fundamentals, traders opted to book profits, especially after a swift appreciation. Around 1.34 crore shares changed hands by 10:30 am on the BSE, indicating heightened activity and short-term churn.
Analysts See Profit Booking, Not Trend Reversal
Market analysts noted that the decline appears more like a cooling-off phase than a structural setback. The stock’s recent rally had been driven largely by speculative sentiment. As that excitement tapered off, momentum traders pulled back, leading to a temporary drop. Analysts emphasised that long-term investor confidence in JP Power remains largely intact, and Friday’s move reflects short-term positioning rather than a change in fundamental outlook.
