Jaiprakash Power Ventures Ltd has received a notice from the Central Bureau of Investigation and is complying with the probe, Chairman Manoj Gaur said on Friday.
A panic among investors was leading to the company's share fall, he said.
Shares in Jaiprakash Power were down about 7 per cent to 49.15 rupees at 11.15 am after media reports suggested that India will widen probe into a scam where bank officials allegedly took bribes to facilitate loans to companies.
The Central Bureau of Investigation told Reuters later in the morning that it was not yet considering widening the probe. Group company Jaiprakash Associates and Jaypee Infratech Ltd were down 11.3 per cent and 9.6 per cent respectively.
"It's unfortunate that people are doubting good companies in bad times," Gaur told Reuters over the telephone.
Jaiprakash Power has not more than 12 billion rupees loan from Punjab National Bank, Bank of India and Central Bank of India and no loans from LIC Housing, Gaur said.
"Jaiprakash Power Ventures had syndicated a loan of 90 billion rupees, out of which only a 16 billion rupee-loan was arranged with partial assistance from Money Matters ," Gaur said, adding that the loan is for projects, which are now already in operation.