CG Power & Industrial Solutions , a prominent player in the power and industrial equipment sector, has recently received a significant tax assessment order from the Income Tax Department. The company now faces a tax demand of Rs 33.02 crore for the Assessment Year 2020-21, stemming from various disallowances and additions made by the tax authorities.

Key Details of the Tax Assessment

Company's Stance and Future Actions

CG Power has stated its intention to challenge the assessment order by filing appeals against the additions and disallowances. The company expressed confidence in its position, citing that based on legal precedents and opinions, it believes it has a fair chance of succeeding in the appeal process.

Context of the Assessment

This tax demand comes in the wake of a previous court order by the Bombay High Court. The court had directed the Central Board of Direct Taxes (CBDT) to allow CG Power to file revised income tax returns based on recast accounts for the financial years 2014-15 to 2019-20. The current assessment for AY 2020-21 appears to be part of this ongoing process of reassessment and financial reconciliation.

Potential Impact and Outlook

While the tax demand of Rs 33.02 crore is substantial, CG Power's decision to appeal suggests the company is prepared to engage in a potentially lengthy legal process to contest the assessment. The outcome of this appeal could have significant implications for the company's financial statements and tax liabilities.

Investors and stakeholders will likely be watching closely to see how this tax issue unfolds, as it could impact the company's financial position and future earnings reports. However, it's important to note that such tax disputes are not uncommon for large corporations, and the final outcome may differ from the initial assessment.

As the situation develops, CG Power is expected to provide further updates to its shareholders and the market regulators, in line with its obligations under the SEBI Listing Regulations.

CG Power & Industrial Solutions has reported proper utilization of proceeds from its Rs 3,000 crore Qualified Institutional Placement (QIP), according to the monitoring agency report for the quarter ended September 30, 2025. CARE Ratings Limited, serving as the monitoring agency, confirmed no deviations from the stated objectives.

QIP Details and Fund Utilization

The QIP was conducted from June 30 to July 3, 2025. As of the end of the quarter, Rs 179.12 crore has been utilized, with Rs 2,820.88 crore remaining unutilized. The company has deployed the unutilized funds in fixed deposits and mutual funds across various banks, including State Bank of India, HDFC Bank, and Axis Bank.

Allocation of Funds

The major allocations of the QIP proceeds are as follows:

Progress and Implementation

The company reported that all statutory approvals related to the objectives have been obtained. The monitoring agency confirmed appropriate utilization as per the offer document. The implementation of various objectives is ongoing, with no delays reported as of now. CG Power aims to complete the utilization of funds by Fiscal 2029.

Investment of Unutilized Funds

CG Power has invested the unutilized funds primarily in fixed deposits with SBI, HDFC Bank, and Axis Bank, as well as in mutual funds. The fixed deposits have maturity dates ranging from 2027 to 2030, with interest rates between 6.35% and 6.60%.

Conclusion

The monitoring agency report indicates that CG Power & Industrial Solutions is proceeding as planned with the utilization of its QIP proceeds. The company's strategic investments in its subsidiary for semiconductor assembly, capital expenditure for power transformer plants, and provisions for acquisitions showcase its focus on growth and expansion in the power and industrial solutions sector.

Investors can take confidence in the proper management and deployment of funds, as verified by the independent monitoring agency. As the company continues to implement its plans, stakeholders will be keen to observe the impact of these investments on CG Power's future performance and market position.