Update as of Wednesday: Mr. Market appeared to confirm Gudovac's assement. Jaiprakash shares were punished dropping to 233.50 Rs. This is lower than the bottom of the 238- 243 range for the equity offering sold on Wednesday. Jaiprakash's Investment Advisors have some explaining to do to their 'valued clients'.
Gudovac established that a good price to buy Jaiprakash is 160 Rs. back in August. The latest information indicates that Gudovac wasn't too far off prudent investment advice. Jaiprakash is raising capital via an equity offering to be priced in a few hours. The dilutive effect of the offering is obvious and may be harmful to existing shareholder. The pricing at a discount from today's close indicates that smart money does not value Jaiprakash shares as highly as Mr. Market. Owners will be soon able to determine what the impact is of the equity offering on the good-price-to-buy question.
Jaiprakash to raise up to $200 mln - sources
MUMBAI (Reuters) - Construction and engineering firm Jaiprakash Associates plans to raise up to $200 million through share sales, three sources with knowledge of the deal said on Tuesday.
The shares are expected to be sold in block deals on Wednesday in a price range of 238 to 243 rupees each, a discount of 2.8 to 4.8 percent of Tuesday's close of 250 rupees.
Bank of America Merrill Lynch are the arrangers to the deal, the sources said.
The shares form part of the treasury stock created after the company absorbed its units Jaypee Hotels, Jaypee Cement and Gujarat Anjan Cement, and group firm Jaiprakash Enterprises in March, creating a stock of around 200 million shares.
A Jaiprakash spokeswoman could not be reached for comment.
Earlier in June, Jaiprakash had sold 25 million shares from the block at 201.05 rupees each, raising $104 million.
(Reporting by Prashant Mehra and Narayanan Somasundaram; Editing by John Mair)
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