On November 19, 2024, Godawari Power and Ispat Limited (GPIL) entered into definitive transaction documents with Jammu Pigments Limited (JPL), marking a significant step in expanding its business operations. GPIL has agreed to acquire a 51% stake in JPL, a leading player in the recycling of non-ferrous metals, for a total consideration of ₹254.52 crores. This acquisition is subject to the satisfaction of conditions precedent and is expected to be completed by March 31, 2025.

Transaction Details

• GPIL will acquire a 49% stake in the first tranche, involving the subscription of compulsory convertible preference shares (CCPS) and secondary share purchase from the existing promoters of JPL.
• In the second tranche, GPIL will acquire an additional 29% stake, bringing its total stake in JPL to 51% on a fully diluted basis.
• The total transaction cost amounts to ₹254.52 crores, which includes the purchase of shares and subscription to CCPS.

Target Company Overview: Jammu Pigments Limited (JPL)

JPL specializes in the recycling of non-ferrous metals, focusing on the processing of lead acid batteries and other secondary lead waste. It operates with advanced technical expertise to extract valuable metals such as Lead, Tin, Zinc, Copper, and Cadmium.

• Manufacturing units: JPL has facilities in Kathua district (Jammu & Kashmir) and Kota (Rajasthan).
• Revenue for last three years:
  • FY 2023-24: ₹1,173.78 Crores
  • FY 2022-23: ₹1,013.38 Crores
  • FY 2021-22: ₹825.70 Crores
  • EBITDA and profit growth: JPL has demonstrated consistent growth, with a notable increase in EBITDA and Net Profit in the past three years, signaling a healthy financial trajectory.

Strategic Significance of the Acquisition

This acquisition aligns with GPIL's strategy to diversify its operations into the recycling industry, a rapidly growing sector. The move into non-ferrous metal recycling opens up new growth avenues for GPIL, allowing it to leverage JPL's established capabilities in this emerging business.

The recycling industry presents long-term growth opportunities, especially as global demand for recycled metals increases. By acquiring a majority stake in JPL, GPIL is positioned to gain a competitive edge in this sustainable business area while strengthening its market position.

Regulatory Compliance

The transaction complies with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The disclosure has been made to both BSE and NSE to ensure transparency in line with regulatory standards. No government or additional regulatory approvals are required for the transaction.

Looking Ahead

Upon the completion of this acquisition, JPL will become a subsidiary of GPIL, further consolidating GPIL’s position in the metal recycling market. The company anticipates this move to unlock synergies between the two entities, driving future growth and profitability.

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