Godawari Power & Ispat Ltd. (GPIL), a listed company, is going to acquire the power undertaking of its unlisted associate company, Jagdamba Power and Alloys Ltd. (JPAL). It is going to be an all stock deal. Earlier in 2018, the companies had tried to amalgamate JPAL into GPIL but the shareholders of JPAL had rejected the scheme. Now in a renewed effort, GPIL has again knocked the doors of JPAL to meet its power needs.

Godawari Power & Ispat Ltd. (GPIL), formerly Ispat Godawari Ltd (IGL), a listed company, is a flagship company of the Raipur based HIRA Group of Industries. Founded in 1999 by Mr. Bajrang Lal Agrawal, company operates in mainly two business segments of Steel and Electricity. The major driver of revenue and profit is the sale of steel and related products. Today GPIL is an end-to-end manufacturer of mild steel wires and in the process also manufactures sponge iron, billets, alloys, captive power, wires rods, steel wires, Oxygen gas, fly ash brick and iron ore pellets. It also generates power for captive consumption.

GPIL mainly functions out of 2 states: Chhattisgarh and Rajasthan. While most of its business is based in Chhattisgarh, it has one 50MW solar power plant in Rajasthan. It has 3 subsidiaries: Godawari Green Energy Ltd. (GPEL), Ardent steel Ltd. (ASL) and Godawari Energy Ltd. (GEL) None of them are wholly owned. It also has a step-down subsidiary called Hira Energy Ltd. (subsidiary of ASL). From its AR – 2019 GPIL says that only GPEL and ASL are functional while GEL’s projects never commenced and have been abandoned. Also, revenue from  Hira Energy is insignificant.

Jagdamba Power and Alloys Ltd. (JPAL) is an unlisted company. It was incorporated in 1999. The company operates in 2 segments: Steel and Electricity. Over 58% of its revenue in 2018-19 came from sale of electricity, which was sold exclusively to GPIL under a short term “Power Purchase Agreement” (PPA). Besides, JPAL also manufactures HB wires (mesh wires of steel) and provides Job work services. The Power Plant became operational in FY 19 only and is a captive power supplier to GPIL.

JPAL is based in Siltara, Raipur, Chhattisgarh and it has no subsidiaries. The company is promoted by Mr. Alok Agrawal.

The Transaction

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