Team News Riveting
Raipur, February 17
The Godawari Power and Ispat Limited (GPIL), the flagship arm of Hira Group, would infuse Rs 400 crore of capital expenditure (capex) to set up iron ore beneficiation and a pellet plant.
The capex of Rs 400 crore is already coming in from the last year as the company has not announced new capex in the current year, except the 70 — one rolling mill modification plan. “We are continuing with our normal capex plan, setting up of the solar projects and other efficiency improvement, capacity expansion projects, mainly funded through the internal accrual,” GPIL executives said during an earnings conference call.
The move by union government to remove the export duty on iron ore pellet and steel product has made them more confident, and they have accordingly announced the league of its iron ore mining and pellet capacities, the capacity of iron ore or mine is supposed to be expanded to 6 million tons from 2.35 million tons currently. Additionally, a 6-million-ton iron ore beneficiation facility was also proposed to be built at the mine itself.
“Both these projects have a combined capex of about Rs 200 crore, they said, adding that another Rs 100 crore of capex is proposed to be made to increase the pellet capacity from 2.7 million tons to 5.7 million tons by establishing a new 3-million-ton iron ore pellet plant at the existing plant location,” the company officials said. “In this regard, I would like to clarify that although the company had announced the capacity of 2.7 million tons of pellet originally, in view of availability of a single unit of 3-million-ton pellet plant capacity, we have decided to increase the capacity from 2.7 million to 3 million tons of the proposed plant. And therefore, now the overall capacity would increase to 2.7 million to 5.7 million tons,” they added.
The Chhattisgarh-based company also plans to set up a 1-million-ton greenfield steel project that is still waiting for process for acquisition of legal and other approvals like environmental and approval, water allocation, etcetera. The final plant configuration and product mix is still being worked out and shall be announced with the announcement of the capex post the shift of all these approvals, the officials said.
However, further as a forward integration, the company has decided to increase the capacity of its steel billet plant from 0.4 million tons to 0.5 million tons which was put on hold and also decided to undertake modernization of one of the existing rolling mills with the capacity of 2.16 to convert the same for manufacture of steel structural and strip mill as a backward integration to fabrication from galvanizing facility and backward integration to our ERW pipe capacity.
The company has already commissioned a 70 megawatts solar power plant at Rajnandgaon and started drawing power from this plant. The acquisition of Jagdamba Power plant has also been completed, regarding other two solar projects, 1 solar project of GPIL with a capacity of 30 megawatts is expected to be commissioned by end of June for supply of power to the mine. And another project of 60-megawatt capacity for Hira Ferro Alloys is expected to be commissioned by March 2023, GPIL executives said.
The consolidated revenue of the company increased to Rs 1,463 crore in third quarter of the fiscal (Q3 FY ’23), up 12 per cent quarter-on-quarter basis, but down 9 per cent Y-o-Y (year-on-year). The lower sales on Y-o-Y basis were mainly due to fall in realization of pellet and ferroalloy. Higher Q-o-Q sale was on account of trading sales of Rs 241 crore. Excluding trading sales, there was a fall in the revenue at Rs 1,222 crore.
The consolidated EBITDA was Rs 173 crore, down 25 per cent quarter-on-quarter and 55 per cent Y-o-Y, mainly due to lower realization on Y-o-Y basis for the pellet and sponge iron and other value-added products on quarter-on-quarter basis.
The officials said GPIL is an integrated steel company and as of December, it had a net cash of Rs 600 crore.
