While other leading players in the realty and construction are reeling under investors’ loss of confidence, JP Infra’s stock has zoomed by over 40 per cent from Rs.44.50 exactly a month ago to Rs.63.05 on the BSE, outpacing peers. This has happened even though Jaypee Infratech had liabilities of over Rs.6,000 crore at the end of last fiscal.
The F1 track in Greater Noida is all set to host India’s first Grand Prix and investors have warmed up to the idea that firm may undertake the ribbon development on 6175 acres in five locations along the Yamuna Expressway.
Along with the market value, the brand value has increased manifold for Jaypee Group, created by former civil contractor Jaiprakash Gaur. While brand value is always intangible, the Group’s possible monetary gain from F1 makes Jaypee is now a widely known name globally.
The world over F1 is associated with economic activity running into millions of dollars. For example, F1 races generate over a billion dollar spin-off businesses in Australia, Canada and the UK. In Malaysia and Bahrain the first F1 races saw the generation of $300 million of economic activity, claimed F1 officials in August. This can happen in India also, specially Jaypee which has businesses ranging from infrastructure, hospitality and real estate.
Jaypee Infratech is an 83 per cent subsidiary of Sensex firm Jaiprakash Associates. Jaypee Sports International (earlier named JPSK Sports), another subsidiary, has completed the construction of the Buddha International Race Circuit that will host India’s first F1 Grand Prix this weekend. According to estimates, the race circuit was built at a cost of Rs.1,000 crore.
This has also boosted the stock of Jaiprakash Associates by 5.4 per cent from Rs.69.10 to Rs.72.80. This has made the promoters of both the companies richer by over Rs.3,000 crore in one month.
Other investors too have gained. It hasn’t rubbed off on large-cap stock Jaiprakash Power Ventures, another group company, which has lost over 14 per cent.
