Godawari Power And Ispat limited has informed the Exchange about Approval for Setting up of 1.00 MTPA Integrated Steel Plant.
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The board of Godawari Power and Ispat Limited has approved setting up a 1.00 Million Tons Per Annum (MTPA) Integrated Steel Plant to manufacture heavy and medium section structural steel and wire rods. The plant will come up at village Sarora, Tehsil Tilda, District Raipur, Chhattisgarh, about 50 km from Raipur, at an estimated cost of Rs. 7,000 Crores. The project will be funded through debt and internal accruals in a 1:1 ratio (Rs. 3,500 Crores each) and is expected to be completed in about 3 years and 6 months. The new plant will triple the company's existing capacity of 0.5 MTPA at Siltara, which is already running at over 95% utilisation. Management cited growing demand for structural steel in India as the key rationale.
This is a major capital expenditure that will significantly increase the company's debt and capital base, potentially pressuring leverage ratios and return metrics in the near term. However, with existing capacity already near full utilisation and strong demand outlook for structural steel, the capacity doubling/tripling supports long-term revenue and earnings growth for shareholders.