Godawari Power rises 3% as board approves ₹255 crore stake acquisition in JPL

Shares of Godawari Power & Ispat (GPIL) saw a 3% rise on Thursday, reaching an intraday high of ₹191.15 on the BSE. This upward movement came following the company’s announcement to acquire a 51% stake in Jammu Pigments Limited (JPL) for ₹255 crore on a fully diluted basis. The deal marks a significant step for GPIL as it aims to diversify its portfolio and enter the recycling of non-ferrous metals—a move that could attract investors looking to invest in stocks tied to sustainability.

The strategic intent behind the acquisition

GPIL’s board of directors has approved the acquisition, which is subject to the execution of transaction documents and certain pre-conditions. Commenting on the development, B.L. Agrawal, Managing Director of GPIL, emphasised that the acquisition aligns with the company’s environmental, social, and governance (ESG) goals.

“This strategic move supports our commitment to portfolio diversification and environmental sustainability. It strengthens our asset base, mitigates risks, and unlocks new market opportunities while delivering long-term value to our stakeholders,” Agrawal stated.

About Jammu Pigments Limited

JPL specialises in recycling non-ferrous metals, including lead-acid batteries and secondary lead waste. The company employs advanced technologies to extract trace metals like lead, zinc, copper, tin, and cadmium from industrial waste, ensuring cost-effective operations. JPL’s manufacturing facilities are located in Kathua, Jammu & Kashmir, and Kota, Rajasthan, with wholly owned subsidiaries supporting its operations.

By acquiring a majority stake in JPL, GPIL seeks to position itself as a key player in the growing non-ferrous metals recycling sector. This industry holds promise due to its increasing relevance in circular economy practices and sustainable resource utilisation.

Portfolio diversification and cancellation of RGPL deal

The acquisition of JPL reflects GPIL’s intention to diversify its business focus beyond its traditional iron and steel operations. In light of this, the company also decided to cancel a previously approved acquisition of a 74% stake in RG Pigments (RGPL), which will remain a 100% subsidiary of JPL.

The transaction is expected to be completed in multiple tranches by March 31, 2025. Once finalised, this acquisition is likely to enhance GPIL’s market positioning and contribute to its overall growth strategy.

Broader market impact

While GPIL shares gained on the acquisition news, the broader market remained subdued. At 10:14 AM, GPIL was trading at ₹181.85, reflecting a 2.23% drop from its earlier peak. The BSE Sensex, meanwhile, was down by 0.71% at 77,031.06 levels.

Analysts see the acquisition as a strategic move that aligns with GPIL’s long-term goals and growth trajectory. For those planning to invest in stocks with a focus on ESG initiatives, GPIL’s foray into non-ferrous metals recycling could make it an attractive option.

Conclusion

GPIL’s acquisition of a majority stake in JPL underscores its commitment to innovation and sustainability. By expanding into non-ferrous metal recycling, the company is poised to leverage emerging opportunities while strengthening its core business. Investors will be closely watching how this strategic move unfolds in the coming months.