In a significant development for GMR Power and Urban Infra Limited (GPUIL), the Supreme Court has dismissed appeals by Distribution Licensees of Haryana and GRIDCO (Grid Corporation of Odisha Ltd.), upholding a crucial ruling on coal allocation. The decision confirms the Appellate Tribunal for Electricity's judgment from December 2019 regarding the proportionate allocation of linkage coal among three state DISCOMs.

Key Points of the Ruling

• The Supreme Court's verdict maintains that GMR Kamalanga Energy Limited (GKEL), a subsidiary of GPUIL, should allocate linkage coal proportionately among its three beneficiary state DISCOMs: Haryana, Bihar, and Odisha.
• This ruling allows GKEL to recover outstanding payments from Haryana Discoms, along with applicable interest as per the Power Purchase Agreement (PPA) terms.
• The judgment resolves a long-standing dispute, as Haryana Discoms had been making only partial payments for additional coal costs while the matter was pending before the Supreme Court.

Implications for GMR Kamalanga Energy

The court's decision is expected to have significant financial implications for GKEL:

1. Recovery of Dues: GKEL can now recover the balance amount of additional coal costs from Haryana Discoms, which had been partially withheld during the legal proceedings.
2. Interest Recovery: The company is entitled to receive applicable interest on the outstanding amounts as per the PPA terms.
3. Operational Clarity: The ruling provides clear guidelines on the allocation of linkage coal, potentially streamlining GKEL's operations and financial planning.

Corporate Disclosure

GPUIL, in compliance with SEBI regulations, has informed the stock exchanges about this development. The company clarified that while the judgment pertains to its subsidiary GKEL, GPUIL itself was not directly involved in the case.

The full text of the Supreme Court's judgment is available on the official Supreme Court website for public reference.

This ruling marks a significant milestone in the power sector, particularly for companies with multiple state DISCOMs as beneficiaries. It sets a precedent for the equitable distribution of resources and cost allocation in similar arrangements across the industry.

GMR Power & Urban Infra Limited, a key player in the power and urban infrastructure sector, has disclosed a significant share pledge by its promoter, GMR Enterprises Private Limited. The company revealed that the promoter has encumbered shares representing 77.19% of promoter shareholding, which exceeds 20% of the total share capital.

Share Pledge Details

GMR Enterprises Private Limited pledged 10.5 million shares, equivalent to 1.47% of the company's total share capital, to Arka Fincap Limited, a Non-Banking Financial Company (NBFC). This move is part of a larger encumbrance that now covers a substantial portion of the promoter's holdings in the company.

Promoter Shareholding and Encumbrance

GMR Enterprises Private Limited, the promoter entity, holds a total of 361.43 million shares, representing 50.56% of GMR Power & Urban Infra's total share capital. With this latest pledge, the promoter has now encumbered shares that account for 77.19% of its total shareholding in the company.

Purpose and Valuation

The company stated that the pledge was made for personal use by the promoters. The encumbered shares are valued at ₹1,173.48 crores, set against a borrowed amount of ₹500.00 crores. This arrangement provides a security cover ratio of 2.35, indicating a significant buffer in the collateral provided.

Financial Implications

Regulatory Compliance

As per the LODR (Listing Obligations and Disclosure Requirements) filing, the company has duly informed the stock exchanges about this development. GMR Power & Urban Infra Limited is listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

The disclosure also confirms that the encumbered shares exceed both 50% of promoter shareholding and 20% of the total share capital, triggering mandatory reporting requirements under SEBI regulations.

This share pledge by GMR Enterprises Private Limited marks a significant financial move for the promoter group of GMR Power & Urban Infra Limited. While the pledge is stated to be for personal use by the promoters, investors and market watchers will likely monitor any potential impacts on the company's governance and financial stability going forward.