Jaypee Hotels reversed gains on profit booking and was trading up 0.24% at Rs 83.50 at 10:20 IST after its board approved a merger of the company with parent Jaiprakash Associates.
Jaiprakash Associates was down 5.66% at Rs 82.45 in a weak market.
The company made the announcement after market hours yesterday, 22 December 2008.
Meanwhile, the BSE Sensex was down 157.11 points, or 1.58%, to 9771.24.
On BSE, 20,694 shares were traded in the counter. The scrip had an average daily volume of 2475 shares in the past one quarter.
The stock hit a high of Rs 90 in early trade. However, profit booking at higher level pulled the stock to the day's low of Rs 81. The stock later came off the lower level. The stock had a 52-week high of Rs 288.40 on 31 December 2007 and a 52-week low of Rs 39.55 on 5 December 2008.
The stock is up 77.65% from a recent low of Rs 47 on 5 December 2008
The stock had outperformed the market over the past one month till 22 December 2008, soaring 73.54% as compared to the Sensex's 11.36% rise. It had also outperformed the market in the past one quarter, falling 7.19% as compared to the Sensex's fall of 29.06%.
The small-cap hospitality firm has an equity capital of Rs 55.49 crore. Face value per share is Rs 10.
The current price of Rs 83.50 discounts its Q2 September 2008 annualised EPS of Rs 2.10, by a PE multiple of 39.76.
Jaypee Hotel's board approved the amalgamation of Jaypee Hotels with Jaipraksh Associates, effective retrospectively from 1 April 2008. However, the merger is subject to requisite approvals and sanction from the court, the company said.
As per the the merger scheme, shareholders of Jaypee Hotels would be allotted one share of Rs 2 each of Jaiprakash Associates for each share of Rs 10 held.
The parent firm Jaiprakash Associates held 72.18% in the Jaypee Hotels unit as on 30 September 2008.
The board of Jaiprakash Associates, yesterday (22 December 2008), approved the acquisition of its units Jaypee Hotels, Jaypee Cement and Gujarat Anjan Cement. It will also acquire group firm Jaiprakash Enterprises
The merger will bring the group's all cement companies under one roof enhancing economies of scale and effectively deal with demand-supply mismatch in different regions, the Delhi-based company said. The move will also help the company avoid outgo on account of dividend distribution tax (DDT).
Jaypee Hotels' net profit rose 81.4% to Rs 2.92 crore on a 10.6% rise in sales to Rs 40.25 crore in Q2 September 2008 over Q2 September 2007.
Jaypee Hotels owns and operates a chain of high-end boutique hotels in India.