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Mumbai: Suraksha Realty, the successful bidder of Jaypee Infratech, will pay an exit price to the retail shareholders while taking the company private, setting a precedent in cases where distressed listed companies are being acquired through the Corporate Insolvency Resolution Process (CIRP).The successful resolution applicant of Jaypee Infratech will pay on a par with the liquidation value of the company to its shareholders holding about 542 million equity units while delisting the company from the stock exchanges. “The board of directors of the company has fixed June 21, 2024, as the record date for determining the names of the shareholders to whom the exit price will be paid for the purpose of delisting and subsequent extinguishment of issued equity shares,” said a regulatory disclosure. The company said that the existing public shareholders shall be given an aggregate exit at a price of Rs 14 lakh, which is not less than the liquidation value. "The payment to equity holders is a goodwill gesture," said a lender. Ashish Pyasi (partner) Aendri Legal, said the shareholders of a company are the last stakeholders in the waterfall mechanism provided under the insolvency code.“In most cases, the debt is so high that even the financial creditors are not fully paid and have to take a haircut under the plan so the question of the last person standing in the queue getting anything doesn’t arise,” said Pyasi. “Jaypee Infratech resolution plan is unique where the applicant is offering exit prices to the retail shareholders. Even in big cases like DHFL, a zero exit price was proposed. So in this sense, the step by the resolution applicant is unprecedented.” At the time of the approval of the resolution plan, the distressed builder had admitted liabilities of over Rs 23,083 crore, including Rs 9,783 crore from its secured financial creditors. “Payment to shareholders has been a bone of contention as generally as per Section 53 the payout is not even enough to pay financial creditors. This order will clearly set some precedent for future similar cases,” said Nipun Singhvi, managing partner of law firm NSA Legal. “Shareholders are at the bottom of the pyramid and payment to them is a ray of hope but varied practices. In the past, in cases such as National Steel and Agro Industries (NSAIL), Videocon Industries and Sintex Industries, their respective acquirers didn’t propose any payment to shareholders.” The development comes at a time when an investor in Reliance Capital (RCAP) has approached the Bombay High Court challenging the delisting of the company shares following the closure of the resolution process. Originally, Anil Ambani promoted RCAP was acquired by IndusInd International Holdings (IIHL) through the CIRP process. Last year, the National Company Law Tribunal (NCLT) approved Suraksha Realty's resolution plan wherein the winning bidder will offer about 2,500 acres to the bankers and about Rs 1,300 crore by way of non-convertible debentures. The company also proposed to complete all pending flats allotted to customers in about four years. Jaypee Infra shares closed at Rs 1.27 apiece, and the company has a market cap of Rs 176 crore.

Nifty ended Wednesday’s session with a gain of 58 points but saw the formation of a small negative candle with upper shadow on the daily chart to signal range-bound action at the crucial hurdle of around 23,400-23,500 levels.The overhead resistance of key Fibonacci extension, opening upside gap of 4th June, upward sloping resistance line are intact around 23,400-23,500 levels. As long as this hurdle is not taken out decisively on the upside, one can't rule out the possibility of a downward correction. Immediate support is at 23,200 levels and a move below this area is likely to trigger a quick selloff in the market, said Nagaraj Shetti of HDFC Securities.Open Interest (OI) data showed that on the call side, the highest OI was observed at 23,500 and 24,000 strike prices. On the put side, the highest OI was at the 23,200 strike price.What should traders do? Here’s what analysts said:Jatin Gedia, SharekhanOn daily charts, we can observe that Nifty has been broadly trading in the range of 23,450 – 23,200 for the last three trading sessions. The hourly momentum indicator has a negative crossover and thus the rallies are fizzling out at higher levels. The ideal strategy would be to buy on a dip around 23,150 – 23,100 where support in the form of the 40 hour moving average is placed. On the upside, 23,400 – 23,450 remains the target zone.Tejas Shah, JM Financial & BlinkXNifty is facing a lot of resilience around 23,340-350 levels on an immediate basis and we need to witness a decisive close above 23,350 levels for further strength in Nifty. Support for Nifty is now seen at 23,200 & 23,000 levels. On the higher side, immediate resistance is at 23,350 levels & the next resistance is at 23,500.Rupak De, LKP SecuritiesThe short-term trend remains positive as the index stayed above 23,300. In the near term, the index might continue consolidating within the 23,300-23,500 range. A decisive breakout above 23,500 could trigger a rally towards 23,800.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Federal Reserve policymakers may feel more confident that inflation is back on a downward path after a U.S. government report showed consumer prices did not rise at all in May, potentially paving the way for interest-rate cuts in coming months. U.S. central bankers, who wind up their meeting on Wednesday, are universally expected to make a decision to hold the policy rate in its current 5.25%-5.5% range. But the unexpectedly benign inflation report, which also showed underlying price pressures cooled to a level more consistent with the Fed's 2% inflation goal, could set them up for a rate cut as soon as September, and another one in December. "After three months of veering off-track, the disinflation bus is back on the road to 2%,"said Brian Jacobsen, chief economist at Annex Wealth Management. Short-term interest-rate futures are now pricing in nearly a three-to-one chance of a rate cut by September, up from only slightly better than a coin toss earlier in the day. Traders also added to bets on a second Fed rate cut by December, with rate-futures pricing reflecting a rising chance but still less-than-50% chance of a third rate cut by the end of the year.