CG Power & Industrial Solutions (CG Power) has received a request from Yanmar Coromandel Agrisolutions Private Limited (YCAS) for reclassification from 'promoter and promoter group' to 'public' category. This development comes in the wake of significant changes in YCAS's shareholding structure.

Shareholding Changes Trigger Reclassification Request

The reclassification request follows a substantial alteration in YCAS's ownership composition. Coromandel International Limited's (CIL) stake in YCAS decreased from 40% to 10.60% due to a significant fund infusion by Yanmar Asia (Singapore) Corporation Pte. Ltd. (Yanmar Singapore). On September 27, 2024, Yanmar Singapore injected Rs. 149.72 crore into YCAS, leading to the allotment of 11,09,00,741 equity shares with a face value of Rs. 10.00 each.

Regulatory Implications

As a result of this transaction, YCAS no longer meets the criteria for classification as a promoter group under the Securities and Exchange Board of India (SEBI) regulations. According to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, an entity is considered part of the promoter group if it holds 20% or more of the equity share capital. With CIL's stake now below this threshold, YCAS falls outside this definition.

Current Shareholding and Control

It's noteworthy that YCAS currently holds zero shares in CG Power. In its request, YCAS has confirmed that it does not exercise any control over CG Power's affairs, lacks special rights or board representation, and has no access to price-sensitive information about the company.

Next Steps in the Reclassification Process

The reclassification request, dated September 16, 2025, will be presented to CG Power's Board of Directors for consideration, as mandated by Regulation 31A of the SEBI Listing Regulations. Following board approval, CG Power will submit an application to the National Stock Exchange of India Limited and BSE Limited, seeking their no-objection to the proposed reclassification.

Regulatory Compliance

In compliance with SEBI regulations, YCAS has provided necessary confirmations, including:

• Neither YCAS nor any related persons hold more than 10% of CG Power's total voting rights
• They do not exercise direct or indirect control over the company's affairs
• They have no special rights through formal or informal arrangements
• They are not represented on the board and do not act as key managerial personnel
• They are not classified as willful defaulters or fugitive economic offenders

Implications for CG Power

This reclassification, if approved, will alter CG Power's shareholding structure, potentially impacting the company's regulatory obligations and public perception. However, given YCAS's current zero shareholding in CG Power, the immediate practical impact on the company's operations is likely to be minimal.

The market will be watching closely as this reclassification process unfolds, particularly for any implications it may have on CG Power's governance structure and future strategic directions.

CG Power & Industrial Solutions , a leading player in the power and industrial equipment sector, has seen its shares soar by 14% over the past four trading sessions. The stock closed at Rs 757.20 on the Bombay Stock Exchange (BSE), marking a significant rally that has caught investors' attention.

Launch of India's First End-to-End OSAT Facility

The recent surge in CG Power's stock price can be attributed to a groundbreaking development in the semiconductor industry. The company, through its subsidiary CG Semi Private Limited, has launched India's first end-to-end Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. This move positions CG Power at the forefront of India's push towards self-reliance in semiconductor manufacturing.

Substantial Investment and Job Creation

CG Power is making a substantial investment of over Rs 7,600.00 crore in two facilities, demonstrating its commitment to the semiconductor sector. These facilities are expected to create more than 5,000 jobs, contributing significantly to employment in the region. The first facility is already operational with a capacity of 0.50 million units per day, while the second facility, currently under construction, aims to reach an impressive capacity of 14.50 million units per day by 2026.

Morgan Stanley Initiates Coverage

Adding to the positive sentiment, global financial services firm Morgan Stanley has initiated coverage of CG Power with an 'Overweight' rating. The brokerage firm's analysis paints an optimistic picture for the company's future performance:

• Projected 34% profit after tax Compound Annual Growth Rate (CAGR) between FY25-FY28
• Industrials business expected to achieve:
  • 14% revenue CAGR
  • 15% EBIT (Earnings Before Interest and Taxes) CAGR
• Power systems division projected to deliver:
  • 35% revenue CAGR
  • 42% EBIT CAGR

These projections span the fiscal years 2025 to 2028, indicating strong growth potential across CG Power's business segments.

Market Impact and Future Outlook

The combination of the OSAT facility launch and positive analyst coverage has clearly resonated with investors, as evidenced by the 14% stock price increase. This rally reflects growing confidence in CG Power's strategic initiatives and its potential to capitalize on the burgeoning semiconductor market in India.

As the company continues to ramp up its semiconductor operations and strengthen its core power and industrial businesses, market observers will be keenly watching CG Power's performance in the coming quarters. The successful execution of its ambitious plans could potentially position the company as a key player in India's evolving tech manufacturing landscape.