Jaiprakash Power shares jump after announcement of divestment. Should you buy?

According to stock market experts, Jaiprakash Power shares are rising due to the announcement of divestment plan by the company in regard to Nigrie Cement Grinding Unit and other non-core assets of the company. This has worked as short-term trigger for the company that helped the stock open with an upside gap despite weakness on Dalal Street. They said that the stock has made ‘V’ shaped recovery on chart pattern and it may give sharp upside movement in short term. They advised shareholders of the company to hold the stock whereas fresh buyers can buy the stock above ₹11.20 levels.

Speaking on the reason for gap up opening for Jaiprakash Power shares, Manoj Dalmia, Founder & Director at Proficient Equities said, “Jaiprakash Power share price has opened upside despite sell-off in early morning deals on Monday. Major reason for this upside opening is company’s announcement just ahead of the market opening today. The company has announced to divest its Nigrie Cement Grinding Unit and other core-assets of the company, which worked as short term trigger for the company. However, the stock is looking positive on chart pattern and shareholders of the stock may continue to hold the scrip maintaining trailing stop loss at ₹7.10 apiece levels.”

Echoing with Manoj Dalmia’s views, Anuj Gupta, Vice President — Research at IIFL Securities said, “Jaiprakash Power shares have strong support at ₹6.50 levels whereas it is facing hurdle at ₹9.50 and ₹11.00 apiece levels. The stock is looking positive after the V shape recovery followed by breakout. If the stock sustains above ₹9.50 apiece levels, it may go up to ₹11 to ₹12 apiece levels.”

On whether a fresh investor can buy Jaiprakash Power shares, Manoj Dalmia said, “One should buy the scrip only when the stock gives breakout above ₹11.20 on closing basis. After this breakout, the stock is expected to become highly bullish and may soon go up to ₹12.90 to ₹13 apiece levels in short term.”

In its exchange communication today, Jaiprakash Power Ventures Limited informed Indian bourses about the divestment citing, “In continuation to our letter dated 9th October, 2022, this is to inform you that the Board of Directors in their meeting held today, the 10th October, 2022, have, inter-alia, decided to divest Company’s Nigrie Cement Grinding Unit as well as other non- core assets.”

The aforesaid Board meeting commenced at 08.15 AM and concluded at 08.55 AM on 10th October, 2022.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.