Jaypee Infratech Ltd (JIL) has posted a consolidated net profit of Rs 88.2 crore for the second quarter of the 2024-25 fiscal year, a significant turnaround from a net loss of Rs 588.31 crore in the same period last year. However, the company’s positive financial results come amid leadership changes, with Managing Director (MD) and Chief Executive Officer (CEO) Aalok Champak Dave resigning from his position.
In its latest regulatory filing, Jaypee Infratech reported a decline in total income, which fell to Rs 222.86 crore in Q2 FY 2024-25, down from Rs 357.92 crore in the same quarter of the previous year. Despite the drop in income, the company managed to turn a profit, signaling a recovery after years of financial turmoil and an ongoing corporate restructuring process.
In a surprise development, Jaypee Infratech announced the resignation of MD and CEO Aalok Dave, effective immediately. Dave, who had been with the company for several years and played a key role in navigating the complex insolvency proceedings, cited personal reasons for his departure. He had also been instrumental in the Suraksha Group’s successful bid to acquire Jaypee Infratech.
The company’s board has appointed Abhijit Gohil as the new CEO, effective November 25, 2024. Gohil will serve a three-year term, stepping in during a critical phase for the company as it continues efforts to revive stalled housing projects and fulfill commitments to homebuyers.
The financial recovery comes amid the ongoing restructuring of Jaypee Infratech, which was taken over by Mumbai-based Suraksha Group earlier this year. In June 2024, Suraksha Group gained control of Jaypee Infratech following a ruling by the National Company Law Appellate Tribunal (NCLAT), which upheld its bid to acquire the company through the insolvency process.
The NCLAT had directed Suraksha Group to pay Rs 1,334 crore to the Yamuna Expressway Industrial Development Authority (YEIDA) as compensation for farmers. While the ruling has been challenged in the Supreme Court by several stakeholders, including YEIDA, Suraksha Group has proceeded with plans to inject funds into Jaypee Infratech and resume construction on stalled housing projects. These projects have left around 20,000 homebuyers stranded.
Jaypee Infratech’s financial troubles began in 2017 when the company was admitted to the Corporate Insolvency Resolution Process (CIRP) due to defaulting on loans. The IDBI Bank-led consortium initiated the insolvency proceedings, and the company went through multiple rounds of bidding to find a buyer.
After several failed attempts, Suraksha Group emerged as the winner in the fourth round of bidding in 2021, securing 98.66% of the votes in the Committee of Creditors (CoC). The company’s resolution plan included an offer of over 2,500 acres of land and nearly Rs 1,300 crore in non-convertible debentures, along with a four-year timeline to complete the stalled projects.
With leadership changes at the helm and new investors injecting capital, Jaypee Infratech is now focused on overcoming its challenges. The company has already begun reviving its stalled housing projects and making efforts to regain the trust of homebuyers and creditors alike. Suraksha Group’s priority remains completing the unfinished projects, some of which have been pending for years.
However, the company still faces significant hurdles, particularly in terms of its legal battles and the payment obligations to YEIDA. The outcome of these cases will play a key role in determining the company’s long-term success and the future of its real estate ventures.
As Jaypee Infratech navigates this critical phase of recovery, the company’s ability to deliver on its commitments to homebuyers, complete its stalled projects, and resolve its legal challenges will be key to its future. The leadership change at the top adds another layer of uncertainty, but Abhijit Gohil’s appointment as CEO brings hope for continuity in the company’s turnaround efforts.
The company’s performance in the coming quarters will be closely watched by investors, creditors, and homebuyers alike, as Jaypee Infratech works towards completing its ongoing projects and settling its financial obligations.
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