The board of Godawari Power & Ispat Ltd (GPIL) has approved a proposal to expand production capacity at its integrated steel plant in Raipur district by one million tonnes per annum (MTPA), entailing an investment of ₹7,000 crore.
Post expansion, the company’s total installed capacity is set to increase to 1.5 MTPA, enabling it to cater to higher demand for structural steel products.
The expansion is aimed at strengthening the company’s presence in the steel sector by manufacturing iron and steel finished products, including heavy and medium structural sections and wire rods, in line with rising domestic demand.
Capacity expansion and funding plan
The proposed integrated steel plant will be located about 50 km from Raipur in Chhattisgarh and is expected to be operational within three-and-a-half years.
The project will be funded through a mix of debt and internal accruals in a 1:1 ratio, reflecting a balanced capital structure.
Currently, GPIL has a production capacity of 0.5 MTPA and the plant capacity utilisation is over 95%.
Portfolio rationalisation
Separately, the company has initiated steps to streamline its investment portfolio by exiting its associate company, Ardent Steel Pvt Ltd (ASPL).
GPIL had earlier announced the sale of its entire 37.85% stake in ASPL for a total consideration of ₹90.87 crore.
Stake dilution in ASPL
On Tuesday, the company transferred two lakh equity shares of ASPL, representing 2.52% equity, to the buyer for ₹6.60 crore.
Following the dilution, ASPL has ceased to be an associate company, with GPIL’s remaining stake reducing to 18.46% from 20.98%.