Godavari Biorefineries receives ₹12.88 crore demand notice from HESCOM
- Godavari Biorefineries received a ₹12.88 crore demand notice from HESCOM regarding cross-subsidy charges on open access power used between 2013 and 2016.
- The total amount comprises a principal of ₹5.91 crore and interest of ₹6.97 crore, with interest exceeding the principal.
- The company has classified the principal amount as a contingent liability and is assessing the overall financial impact.
*this image is generated using AI for illustrative purposes only.
Godavari Biorefineries Limited has received a demand notice of ₹12.88 crore from the Assistant Executive Engineer (E) O & M Sub Division, Hubli Electricity Supply Company (HESCOM), Mahalingpur, Karnataka.
The notice, dated September 25, 2026, pertains to cross-subsidy charges levied on open access power imported by the company between 2013 and 2016. The total amount demanded includes both principal and interest components.
Breakdown of the demand
The authority has specified the composition of the total demand as follows:
| Component | Amount |
|---|---|
| Principal Amount | ₹5,90,95,383 |
| Interest | ₹6,97,32,552 |
| Total Demand | ₹12,88,27,935 |
The interest component constitutes a significant portion of the total liability, exceeding the principal amount itself. This structure reflects the accumulation of charges over the ten-year period since the power was initially imported.
Company response and financial impact
In its disclosure to stock exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company stated that it has considered the principal amount of ₹5,90,95,383 as a contingent liability. The company is currently assessing the further impact of the notice and intends to take appropriate actions with the authority in due course.
What the numbers show
The demand highlights a regulatory exposure dating back over a decade. With interest accounting for roughly 54% of the total claim, the cost of delay in resolution has nearly doubled the original principal obligation. The company’s classification of only the principal as a contingent liability suggests it is contesting or negotiating the interest component, which represents the larger share of the financial burden.
Historical Stock Returns for Godavari Biorefineries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.89% | -2.79% | -1.80% | -23.15% | -12.66% | -31.08% |
Will Godavari Biorefineries' decision to contest the interest component trigger broader litigation risks regarding historical open access power charges in Karnataka?
How might the potential ₹12.88 crore liability impact Godavari Biorefineries' short-term liquidity and credit ratings if the demand is upheld?
Are other industrial consumers in Karnataka facing similar retrospective cross-subsidy demands, indicating a systemic regulatory enforcement trend?
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