GE Power India Limited (GEPIL) has announced a significant restructuring move, approving a scheme of arrangement to demerge its boiler manufacturing business to JSW Energy Limited. This strategic decision, approved by GEPIL's board on September 18, 2025, marks a pivotal moment for both companies in the power sector.

Key Details of the Demerger

The demerger involves transferring GEPIL's business of manufacturing and supplying power boiler components, pressure vessels, piping, and coal mills for thermal power plants at the Durgapur Facility to JSW Energy. This move is designed to streamline GEPIL's operations while allowing JSW Energy to expand its footprint in the energy sector.

Share Exchange Ratio

Under the approved scheme, JSW Energy will issue 10 fully paid equity shares of INR 10 each for every 139 shares held in GE Power India. This share entitlement ratio was determined based on recommendations from independent valuers and has been deemed fair by IDBI Capital Markets and Securities Limited, a SEBI-registered Category-I merchant banker.

Financial Impact

The demerged business generated a turnover of INR 529.50 million in the financial year ended March 31, 2025, representing 5.10% of GE Power India's total revenue of INR 10,471.00 million. Notably, the net worth contribution of the demerged undertaking was negative INR 203.50 million, or -8.70% of GEPIL's total net worth.

Strategic Rationale

For GE Power India:

• Focus on strategic growth areas and services
• Streamline operations and reduce costs
• Unlock value for shareholders

For JSW Energy:

• Enter the boiler pressure parts manufacturing business
• Achieve vertical integration in power generation
• Create operational synergies and improve cost efficiencies

Regulatory Approvals

The transaction is subject to various approvals, including:

• Shareholders and creditors of both companies
• National Company Law Tribunal (NCLT)
• Securities and Exchange Board of India (SEBI)
• Stock exchanges (BSE and NSE)

JSW Energy's Position

JSW Energy, already a significant player in the power generation sector, reported revenue of INR 12,639.49 crores for the financial year ended March 31, 2025. This demerger aligns with their long-term vision of expanding their energy portfolio and extending their footprint in the competitive power sector.

Conclusion

This demerger represents a strategic move for both GE Power India and JSW Energy, potentially reshaping their positions in the Indian power sector. As the companies await necessary approvals, the market will be watching closely to see how this restructuring impacts their future growth and operational efficiency.

GE Power India Limited (GEPIL) has taken a significant step in its ongoing legal dispute with Jaiprakash Power Ventures Limited (JPVL), depositing ₹775.00 crore with the latter as part of a court-mediated agreement. This development comes after a series of legal maneuvers involving bank guarantees worth ₹775.00 crore related to previously announced contracts between the two companies.

Legal Proceedings and Court Orders

The dispute came to light when GEPIL filed petitions under Section 9 of the Arbitration and Conciliation Act, 1996, in the Delhi High Court. These petitions sought to prevent JPVL from invoking bank guarantees submitted by GEPIL under their contracts. Initially, the court granted injunctions in favor of GE Power India on August 1 and 4, temporarily halting any action on the bank guarantees.

Turning of the Tides

However, the legal landscape shifted during subsequent hearings. The Delhi High Court appeared inclined to vacate the injunction on the invocation of Advance Bank Guarantees (ABGs) in favor of JPVL. Facing this potential reversal, GEPIL made a strategic move.

GEPIL's Strategic Response

In a bid to protect its interests, GEPIL requested the court to allow it to deposit an amount equivalent to ₹775.00 crore with JPVL. In exchange, GEPIL sought the return of the un-encashed advance bank guarantees. The court accepted this proposal, effectively modifying its earlier injunction order.

Current Status and Future Implications

The Delhi High Court has disposed of the petitions based on this agreement. As per the LODR (Listing Obligations and Disclosure Requirements) filing by GEPIL on August 28, the company received the court's order on August 27, when it was uploaded to the High Court's website.

GEPIL's Company Secretary and Compliance Officer, Kamna Tiwari, stated in the filing that the company is currently evaluating further steps on the matter. This suggests that while a temporary resolution has been reached, the broader dispute between GEPIL and JPVL may not be fully settled.

Financial Implications

The deposit of ₹775.00 crore represents a significant financial move for GEPIL. While this action prevents the immediate encashment of the bank guarantees by JPVL, it also ties up a substantial amount of GEPIL's funds. The long-term financial impact of this decision will likely depend on the ultimate resolution of the dispute between the two companies.

As the situation continues to evolve, stakeholders will be watching closely to see how this legal and financial maneuver affects both GEPIL's operations and its ongoing relationship with JPVL. The resolution of this dispute could have far-reaching implications for both companies and potentially for the wider power sector in India.