Godawari Power and Ispat Ltd Announces Amalgamation of Subsidiary; Share Price Drops

On March 18, 2024, Godawari Power and Ispat Ltd informed that the company’s board approved the merger of its wholly-owned subsidiary, Godawari Energy Ltd (GEL), with the parent entity.

Details of the Amalgamation

On Monday, Godawari Power and Ispat Ltd announced the amalgamation in the stock exchange filing. The company held a board meeting, and ahead of the meeting, it stated that its Board of Directors considered and approved the amalgamation of the wholly owned subsidiary, Godawari Energy Ltd, with Godawari Power and Ispat Ltd. As the amalgamation will be conducted between a wholly owned subsidiary and its parent holding company, no shares will be issued, or any considerations will be given pursuant to the merger.

They further stated that there will also be no need for a valuation report as there is going to be on change in shareholding pattern following the merger.

The company stated that the scheme of Amalgamation is subject to necessary statutory and regulatory approvals, which include the approvals of the National Company Law Tribunal/other regulatory authorities and the respective shareholders of both companies as may be directed by the National Company Law Tribunal.

Godawari Power and Ispat Ltd said that Godawari Energy Limited planned to set up a plant to generate power. Since Godawari Power and Ispat Ltd is already in the business of generating power, the amalgamation of the two companies will lead to a more efficient utilisation of capital and assets, thereby creating a stronger base for future growth.

Both companies believe that pooling the merged entity’s resources can unlock the opportunity to create shareholder value. This would also lead to reduced time and effort required for consolidating financials and efficient tax planning at the group level. As of December 2023, the net worth of Godawari Energy stood at ₹2,808.08 lakh.

In the same exchange filing, Godawari Power and Ispat Ltd stated that the Nomination and Remuneration Committee of the company recommends appointing Mr Sunil Duggal as Non-Executive Independent Director and Mrs Roma Ashok Balwani as Non-Executive Independent Women Director for 5 consecutive years. This is subject to approval by shareholders in the upcoming Extraordinary General Meeting. If approved, their appointment will be effective immediately after the meeting concludes and the related resolutions are passed.

About Godawari Power and Ispat Ltd 

Godawari Power and Ispat Ltd, formally known as Ispat Godawari Ltd (IGL), is a flagship company of Raipur-based Hira Group of Industries. The company manufactures iron and steel and generates power.

On March 18, 2024, the share price of Godawari Power and Ispat Ltd opened at ₹699 and was trading around 3% lower at ₹670 per share on the NSE at 4:00 PM.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.