How investors can protect their Investment - A realtime analysis
 
Customers of JaypeeInfratech Limited collectively, are at the risk of losing investments of approximately INR 25k Crores on their dream homes.

JaypeeInfratech Limited, a subsidiary of the prestigious Jaypee Group was incorporated in the year 2007 as a Special Purpose Vehicle (SPV) to develop, operate and maintain an expressway connecting Noida and Agra. It is a listed entity whose share prices closed at INR 17.35 on 6th of Sep, 20171.

The Company was in turbulence when IDBI Bank approached the Supreme Court seeking insolvency proceedings against Jaypee Infrastructure Ltd. An Outstanding loan amount of INR.7,55,328.05 Cr was long overdue to Banks (IDBI being the lead banker). The court has stayed the proceedings, delaying any repayments to external creditors.

Approximately 32,000 home buyers have their funds locked-up across 27 projects in JaypeeInfratech Ltd, Further hearings on the case is scheduled on 11th of September. If the insolvency proceedings were to happen, it would render the customers with no benefits. Customers are not recognized as secured creditors as per the Insolvency and Bankruptcy code of 2016, hence they will have the last claim on the funds available.

A basic background & financial research could have indicated the possibility of insolvency before IDBI Bank approached the court. A representation of significant financial parameters are represented in Table 1.a

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The Revenue from operations in all Financial Years represented is over 2000 Crores, but impressive volume of sales do not translate to profits in Financial Year 2015-16. JaypeeInfratech Pvt Ltd has incurred losses of 8.68% in the year. Accepting the risk of investing in less efficient companies may lead to a personal financial crisis. A company that carries a recognizable brand usually assures the customer of safety, but the Financial Indicators in this scenario may be a cause for concern. JaypeeInfratech Ltd had INR 8,21,290 lakhs of borrowings for the year ending March 2016.The Company maintains low risk, with respect to the value of loans borrowed against the share capital below 2 times in all three years. However, the risk appetite of the Company was much lower and it has left all stakeholders vulnerable.

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A brief glance at the profitability of JaypeeInftatech Pvt Ltd, (as represented in graph 1.a) could help potential customers stay aware of the risk associated with choosing a Real-Estate Company. It is clear from the graph that the profitability of the Company has been on a declining trend in the recent three financial years.

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2.a is a Tabular representation of the credit rating of instruments issued by JaypeeInfratech Ltd. A bank loan rating indicates the degree of risk with regard to timely re-payment of the bank facility being rated. As per the recent ratings, the Company has been fairing badly with its debt obligations. Reliable sources of information and research of material details could help clients make decisions that are more informed.

Follow the link below for further details of the directors, financials and charges
www.InstaFinancials.com

Download the Report of JaypeeInfratech Ltd (PDF)

Download the Report of JaypeeInfratech Ltd (Excel)

www.bseindia.com/stock-share-price/jaypee-infratech-ltd/jpinfratec/533207/

 
 
 

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