Godawari Power - Any Trackers?

Stock Opportunities Untested - but worth a good look
907

Amazing to see that GPIL is now going for buy-back

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What an amazing wealth creation story this has been! 5 years back this company was available at a Mcap of just 700-800 Cr and today they are doing a buyback of 300 Cr!

Like discussed in the past in this thread, this sector has gone through big changes and GPIL has done superb execution and adopted good practices.

Ayush
Disc: Invested

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908

In April 20 the total Market Cap was less than 300 Cr. :smiley:

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909

How much is ebidta per ton currently for gpil?

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910

how to maximize returns by participating in buyback last year also gpil did buyback for the price of 500 per share but from that time the share is already 4 times the record date of buyback last year is march 31 2023 and the share is trading on that day361 buy back price is 500 if some one participated in buyback they last 4 times return per sharecompared to today price so just need advice from senior investors from forum

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911

Since GPIL is been deleveraging but atlast is cyclical business and currently it is in high price to book ,if iron ore prices fall ebidta would suffer and that would impact overall business
Disclosure : invested and biased

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912

All of us know about the cyclicity of GPIL business. There is no need to say that profitability will be affected if iron ore prices go down. But besides this, there are several other things to monitor, e. g. diversification, value addition, capacity changes etc.
Incidentally, buyback proceeds have been credited. Surprised to find that acceptance ratio is more than 20% in my case, where as less than 1.5% equity was bought. Stock was on fire intraday, probably related to this.

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913

Close to 24% AR in my case. Last time it was around 35% or so. I would be looking forward for any weakness in price - cyclical or otherwise, to again increase holding.

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914

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GPIL

  • Special Dividend :heart_eyes:
    Stock split
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915

Golden period for investors
Absolute wealth creation

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916

Good QoQ and YoY results declared. Stock split From FV 5 to FV 1 and a special dividend @ 1.25 per share on 25 years of operations.
Godawari Power.pdf (623.6 KB)

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917

Have been reading about crisis in China steel industry and Indian domestic steel prices falling - what is the impact on GPIL? There seems to have been no impact last quarter on profitability.

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918

Background:

A nine-judge Constitution Bench of the Supreme Court, led by Chief Justice DY Chandrachud, rejected the Centre’s request for the prospective effect of its July 25 decision, which upheld states’ authority to levy taxes on mineral rights and mineral-bearing land and allowed them to seek royalty refunds beginning April 1, 2005.

While dismissing the argument that the July 25 verdict had a prospective effect, the court stated that the Centre and mining corporations might pay dues to mineral-rich states in a staggered manner over the following 12 years. However, the Bench asked the governments not to apply any type of penalty for late payment.

Earlier on July 25, the Supreme Court reversed a 1989 decision that declared that only the Centre has the authority to levy royalties on minerals and mineral-bearing land, and stated that states had the legislative ability to tax mineral rights

"How significant would this impact be for Godawari Power & Ispat Ltd (GPIL)?

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919

The impact on iron ore companies is minimal to negligible. GPIL has minimal to negligible impact. TATA Steel and SAIL will have a major impact.

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920

Why it is minimum for mining company if anyone can explain…

921

Impact of SC Judgement on Godawari Power and Ispat Ltd (GPIL) to allow state to collect dues on royalty on minerals from April’2005

  • Chhattisgarh State Government has never to date levied tax on Mining. There is no act imposing tax on mining in the state of Chhattisgarh.
  • Odisha and Jharkhand’s State Government came out with an Act to impose tax on mining in 2005. So against that, mining companies went to court stating State has no power to levy Tax. The matter has been pending since then and now finally Supreme Court has decided that the State has power and can collect tax. Tax collected by them is Constitutional. So companies will have to pay the tax that they were supposed to pay from 2005.
  • Now, Chhattisgarh State Government can also come up with the Act to levy Tax like Odisha and Jharkhand Government. This will be levied from now onwards - can’t be retrospective if Chhattisgarh Government wants to do so. But nothing is there as of now for mining companies in Chhattisgarh.
  • So as of now, there is no impact on GPIL or any company that does mining in Chhattisgarh State.
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922

Retrospective is very nasty. In GPIL’s case it is not a retrospective.

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923

So no retrospective impact and we dont know if prospective impact will be there or not.
So till the time chattisgarh implements new taxes, gpil should have an edge over other mining company which are based in odisha or jharkhand.

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924

I am not sure if this 63.4 Cr contingent liability is the same retrospective tax which GPIL has mentioned in its books : -

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925

“Energy Development Cess” is imposed under the “Chattisgarh Upkar Adhiniyam” on Power Producers and does not relate to cess on minerals. However, as stated by GPIL in the quoted section the matter is pending before the Supreme Court and it is possible that the Court rules in favour of the State. Need to wait and watch

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926