Godawari Power - Any Trackers?

Again, an excellent point raised by you @VALUE2017

What if global recession leads to big FII outflows, crash in global banks and Indian markets?
May be Australian and Canadian real estate bubble will burst and some banks will go bust.
What will be the impact on Indian stock markets and rest of Indian stocks?

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~12% increase in pallet capacity from State Environment Conservation Board.

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Any idea when is the company’s lease due for renewal? In connection with NMDC, I found this on internet - “Government companies or corporations whose mining lease has been extended after the commencement of the MMDR Amendment Act, 2015, are to pay 150% of the royalty payable. In other words, NMDC will be required to pay a 22.5% royalty against 15% earlier, on iron ore volumes from all mines, except for the Kumaraswamy mine (annual capacity 7 mt) in Chhattisgarh. The same had resulted in an additional expenditure of ₹149 crore during Q4 and expenditure will be higher moving ahead”. Just wanted to know if this will hit the company any time soon.

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Its approx. 35-40 years, Boria tibu is valid till 14 March 2060. Ari dongri must be 2-3 years before it.

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Got it, thank you. GPIL seems to be at an advantage when compared to NMDC (not sure of other peers).

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Increasing my allocation in GPIL by re-investing dividend.
12% increase in pellet capacity will offset the fall in price of pellets to a great extent.
Price of semi-steel like sponge iron, billets etc is still at pre-duty level.

Huge growth in coming years because of 4x increase in mining capacity over next 6-7 years.
In addition to huge volume growth, I also expect pricing growth as prices are at the bottom now a days.

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But with the world going into recession, will there be enough demand for the existing capacity, let alone the increased capacity.?

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do you know the annual iron ore consumption globally vs GPIL capacity?
It is not even 0.1% I guess

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In a low demand scenario when prices fall, integrated players would have a significant cost advantage over other players.

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Demand reduction may not be proportionate across companies. And it may not be absolute as well. It will be somewhere in between.

If it is proportionate then all companies will suffer same % of demand reduction. But for argument sake if it is in absolute terms then ‘x’ MT of demand reduction with a company of 100x capacity will be just 1% compared to 50% for a company of capacity 2x.

But yeah, integrated players could weather the situation longer while the weaker players bankrupt. And when the situation reverses, the company which survived will make a killing.

Disc: Have a tracking position in GPIL.

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capacity will come online in 2-3 yrs. by that time recession will be over.
Anyways, GPIL is selling 100% of capacity in India, and India is growing, there is no recession here.

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@Kumar_manas With iron prices going down and down, there will be further correction right?