Godawari Power Acquires Full Ownership of Alok Ferro Alloys Through Buyback
Team Finance Saathi
09/Sep/2024

What's Covered Under the Article:
Godawari Power and Ispat has fully acquired Alok Ferro Alloys through a buyback offer.
Alok Ferro Alloys is now a wholly owned subsidiary of Godawari Power and Ispat, with no participation from GPIL.
The acquisition increases GPIL’s stake in AFAL from 88.34% to 100%, with no additional investment required.
On September 9, 2024, Godawari Power and Ispat Limited (GPIL) announced a significant corporate development regarding its subsidiary, Alok Ferro Alloys Limited (AFAL). In a move to streamline its holdings, GPIL has completed a buyback offer for AFAL, resulting in the latter becoming a wholly owned subsidiary of GPIL. This strategic acquisition was disclosed in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Alok Ferro Alloys Limited, a prominent player in the ferro alloys sector, initiated a buyback offer to purchase 29,91,875 equity shares. Notably, GPIL did not participate in this buyback. As a result, the buyback was completed, and the equity shares held by all other shareholders were acquired, leading to AFAL becoming 100% owned by GPIL.
Detailed Overview:
Company Background
Alok Ferro Alloys Limited has been engaged in the production of ferro alloys for over three decades. It has shown consistent financial performance, with turnovers reported as follows:
2021-22: Rs. 13,465.31 Lacs
2022-23: Rs. 6,911.68 Lacs
2023-24: Rs. 9,620.89 Lacs
AFAL operates exclusively in Raipur, Chhattisgarh, and has a well-established presence in the industry.
Acquisition Details
Transaction Nature: GPIL did not acquire additional shares but benefited from the buyback offer executed by AFAL. Consequently, GPIL’s stake in AFAL increased from 88.34% to a full 100% ownership.
Cost and Consideration: The acquisition did not involve new cash considerations or share swaps; it was a result of the buyback of shares previously held by other shareholders.
Regulatory Approvals: No governmental or regulatory approvals were necessary for this transaction, as it fell under standard corporate restructuring activities.
Industry Context: The ferro alloys industry, which AFAL operates in, is vital for the production of steel and other alloys, essential for various industrial applications.
Implications of the Acquisition
This move consolidates GPIL's position in the ferro alloys sector and simplifies its corporate structure. By holding full ownership of AFAL, GPIL aims to enhance operational efficiency and strategic alignment within its subsidiary. The acquisition also reflects GPIL's commitment to reinforcing its industrial footprint and consolidating its investments in core business areas.
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