Anand Jain-controlled Jai Corp Ltd has proposed to alter the company's memorandum of association to include large-scale infrastructure development projects like airports, roads, rapid transit systems and shopping malls.
Jain is a close associate of Reliance Chairman Mukesh Ambani and is also the chairman of the company's Navi Mumbai Special Eeconomic Zone (SEZ). Jai Corp's price has almost doubled during September 2007, moving from Rs 6,972 on September 3 to Rs 13,886 on October 1.
The company's current businesses include textiles and textile fibres. For the quarter ended June 30, the company recorded sales of Rs 51 crore and a net profit of Rs 34 crore.
The Jai Corp board has moved a set of resolutions to be passed through postal ballot. In the explanatory statement, it says: "The Board of Directors of the company has been exploring various business opportunities and considers…development of infrastructure facilities and services as growth areas for the company's future business plans…"
The new areas of business that have now been incorporated in the memorandum include major infrastructure like roads, bridges, airports, water supply, power generation and telecommunications, cell services and cable services. It also includes hospitals, clinics, amusement parks, free trade zones as well as plantations, horticultures, sericultures, hotels, resorts, clubs, casinos and golf courses.
The shares of the company had touched their 52-week low in October 2006, when it was quoted at Rs 320. It has seen a massive appreciation in the last few months. On June 7, 2007, its scrip was quoted on the Bombay Stock Exchange (BSE) at Rs 1,907.
On September 24, the company announced the acquisition of two PET fibre-manufacturing units. The scrip price, however, kept rising even after the announcement. Its infrastructure foray seems to be the real reason behind the price movement.
Eight members of the Jain family, apart from a few corporate entities, own a little over 87 per cent of the shares in the company. While Anand Jain owns 1.93 per cent of the shares, his wife Sushma Jain holds 13.57 per cent, managing director Virendra Jain owns 5.7 per cent and executive director Gaurav Jain has 6.21 per cent.