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News Topical, Digital Desk : There was a time when this group was considered a major force in the infrastructure and power sectors. During that period, the company's value skyrocketed. Around 2011-12, its market value reached nearly ₹1 lakh crore. But then circumstances changed, debt increased, other group companies ran into trouble, the burden of guarantees became too great, and gradually this once-thriving company teetered on the brink of collapse.
The story of JP Power isn't just about a single stock crash. It's about a time when large companies expand rapidly, only to lose control over debt, cash flow, and group structure, and that expansion can later become a liability.
Today, its stock price rose and news appeared on the exchange.
JP Power is a company worth approximately ₹9,000 crore. On March 12, 2026, when the entire market seemed under pressure, its stock surged. The stock opened at ₹13.60 against its previous closing price of ₹13.66 and then rose above ₹14, a
gain of nearly 5%. But the other side of the picture is equally important. The stock has fallen by nearly 10% in a month and has gained only around 4% in a year. This means that despite the small rally, the long story remains one of struggle.
Just one mistake and the company with a market cap of ₹1 lakh crore sank.
This company's past was very different. In 2007, its stock reached ₹143. Then came a period when the same stock fell to ₹0.35. This shows that the market sometimes held this company in high esteem, and sometimes considered it almost extinct.
The company's business is not small. JP Power operates thermal and hydropower assets. The company operates three large plants with a total capacity of 2,220 MW. These
include the 500 MW Bina thermal plant, the 1,320 MW Nigri thermal plant, and the 400 MW Vishnuprayag hydro plant. The company also has coal mining power, and some capacity is tied up under long-term PPAs. This is why operations haven't completely collapsed.
This is the most interesting part of the story. The company's business is still operating, plants are operational, fuel availability is good in some places, and CRISIL has also acknowledged that the company's operational performance was good in fiscal 2025 and the first half of fiscal 2026.
The company had cash reserves of approximately ₹1,927 crore as of September 30, 2025, and a DSRA of approximately ₹210 crore.
The company even prepaid its entire debt obligation up to September 30, 2026. This means the problem isn't just a day-to-day business.
The real crisis lies in the company's balance sheet, group exposures, and legal risks.
The biggest impact was posed by debt and group structure. In 2019, the company underwent a debt restructuring. At that time, total debt was reduced from ₹11,149 crore to ₹4,870 crore by December 2022. By March 31, 2025, total debt stood at ₹3,755 crore.
Furthermore, the company has stated a future capex requirement of approximately ₹750 crore. On paper, this debt appears lower than before, but the crisis does not end there.
JP Power's biggest problem is that this is not a story of an isolated company. Its promoter company, Jaiprakash Associates Ltd (JAL), is itself undergoing the IBC process.
The NCLT referred JAL to CIRP on June 3, 2024. JAL holds a 24% stake in JP Power.
And even this 24% stake isn't entirely comforting, as 72.99% of the promoters' stake is pledged. This clearly signals to the market that the promoter group itself is under pressure.
Then comes the issue of corporate guarantees. This is the turning point that has cast a new shadow over the company. JP Power had provided a corporate guarantee for JAL's external debt.
Now, National Asset Reconstruction Company Ltd (NARCL) has filed an application with the NCLT based on this guarantee. It alleges a default of over ₹512 crore, including interest and other charges.
This application has not yet been admitted, but for this reason, CRISIL has downgraded the company's ₹5,600 crore bank facility rating to BBB/Watch Negative on March 11, 2026.
This "Watch Negative" designation speaks volumes. It doesn't mean the company is in immediate default, but the rating agency believes the risk of further negative developments has increased.
If the case goes against the company in the NCLT, or there is a significant cash outflow due to the guarantee, the company's liquidity could be impacted.
Furthermore, the company faces show-cause and demand notices totaling ₹7,167 crore related to alleged illegal sand mining, storage, transportation, and sales. Of this, the Andhra Pradesh High Court granted interim relief for ₹2,147 crore, but the remaining cases are still evolving. This is also a significant overhang.
Another pressure is the "Right to Recompense" clause. During the 2019 debt restructuring, a condition was put in place that if the company's profitability and cash flow improve, lenders could receive a portion of the old haircut.
This is still under discussion, raising the specter of future cash outflows.
Operations are also not smooth sailing. Only 56% of the company's total capacity is tied up in long-term PPAs. The remaining 44% of capacity is dependent on the short-term or merchant market.
Prices, demand, coal availability, and margins fluctuate rapidly. This means a significant portion of the company's operations is subject to market volatility.
Furthermore, the payment capacity of the states and discoms to which power is sold is not considered very strong. CRISIL stated that receivables have fallen to 56 days, which is better than before, but exposures of around ₹1,000 crore remain.
Some of this is disputed. This means the money is on the books, but it may take time to reach the bank.
Now, the question is: how did a company valued at ₹1 lakh crore collapse? The simple answer is: overexpansion, group-level crisis, debt pressure, promoter weakness, the burden of corporate guarantees, legal notices, and uncertain cash flow.
This company hasn't completely collapsed. Its plants are running, it still has some operational strength, and it also has cash reserves.
But investor confidence is eroded when balance sheets and legal risks become more important than the business itself. This is what happened with JP Power.
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