Godawari Power: From captive mining to BESS, company maps new growth and capex cycle

Brokerage Systematix recently held a plant visit to Godawari Power and Ispat Ltd’s Siltara manufacturing facility. It engaged in an insightful discussion with the company’s management.

Here is a look at what the brokerage noted following the plant visit.

Mining ramp-up to improve integration and lower costs

The company is stepping up efforts to increase captive iron ore availability, which management expects to improve integration, raise plant utilisation and deliver cost efficiencies.

The approved mining capacity at Ari Dongri was raised to 6.0 million tonnes per annum (mtpa) from 2.35 mtpa on January 31, 2026. Mining volumes are expected to start improving from the third quarter of FY27, with the company targeting full-capacity utilisation by the end of FY27 or early FY28. Commissioning of the new 2.0mtpa natural-gas-based pellet plant in Dec-25 increased total capacity to 4.7mtpa. Higher captive iron ore availability should support better utilisation and integration benefits.

The company operates two captive magnetite iron ore mines with 165mt reserves and 35 plus years of mine life.

Imported coal supports stable sponge iron production

The sponge iron operations primarily rely on imported coal, while domestic coal is used selectively when it offers a cost advantage.

Management said imported coal, which has a lower sulphur content, helps maintain more consistent operating conditions at the plant. Its availability also allows the facility to operate for almost the entire year, supporting higher productivity and more stable sponge iron output.

Pellet capacity rises to 4.7 mtpa

The company's total pellet-making capacity stands at 4.7 mtpa, including the 1.8 mtpa facility visited during the plant tour.

The pelletisation process involves grinding iron ore fines and mixing them with bentonite and other additives before forming them into green pellets. These pellets are then screened, pre-heated and fired at temperatures of around 1,150-1,200 degrees Celsius to achieve the required strength and size.

The finished pellets typically contain around 62-65% iron and are generally produced in the 8-16 mm size range.

The commissioning of a new 2.0 mtpa natural-gas-based pellet plant in December 2025 lifted the company's overall pellet capacity to 4.7 mtpa. Management expects greater captive iron ore availability to improve utilisation of these facilities and strengthen the benefits of vertical integration.

Power generation: Scope to improve utilisation

The company has a combined thermal power and waste heat recovery boiler (WHRB) capacity of 56 MW. Current generation, however, is around 42 MW as one of the boilers is undergoing maintenance.

The power plant has four boilers connected through a common header. The WHRB system captures waste heat and steam generated during the sponge iron manufacturing process and uses it to generate electricity through a turbine.

With the maintenance shutdown completed, the company expects scope for improved utilisation and greater efficiency from its power-generation infrastructure.

Transmission and distribution

The company has billet-making capacity of around 0.525 mtpa, with approximately 60-70% of the output consumed internally. Downstream rolling capacity is planned to increase from roughly 214 ktpa to 300 ktpa, while galvanising capacity currently stands at around 110 ktpa.

The power and transmission sector accounts for around 60-70% of the company's galvanised product sales, while wind turbines contribute another 10-15%. The company has also begun supplying major customers, including Tata Power, Tata Projects and Adani.

Beyond conventional transmission towers, the company is developing monopoles and distribution poles. Management sees these products as a promising growth opportunity as land constraints increase and utilities seek more compact transmission and distribution infrastructure.

BESS could become a new growth engine

Battery energy storage systems (BESS) are emerging as another potential growth vertical for the company.

The company is setting up a 20 GWh BESS manufacturing facility in Maharashtra and is evaluating both engineering, procurement and construction (EPC) as well as build-own-operate (BOO) business models. Production of the first container is targeted for the first quarter of FY28.

Management is also evaluating the possibility of using output from the CRM facility to manufacture BESS containers. Around 10-12% of the CRM plant's output could potentially be sufficient to meet the steel requirement for the planned 20 GWh container capacity.

Rs 2,000 crore capex 

The company's proposed Integrated Steel Plant (ISP) remains on hold due to delays in obtaining water-allocation approvals. The project has therefore been excluded from the company's medium-term growth plans.

Excluding the deferred ISP, management plans to invest around Rs 2000 crore over the next 18 months. This includes approximately Rs 1000-1100 crore for the CRM complex, Rs 700 crore for the BESS facility and around Rs 200 crore towards mining.

The 0.7 mtpa CRM project is estimated to require total capex of around Rs 11 billion. Of this, approximately Rs 5.5 billion is expected to be funded through debt, with the balance coming from internal accruals. The company has already received the required bank sanction.

Management expects the overall capex programme to be funded through internal cash generation while maintaining a comfortable balance sheet, with the focus remaining on expanding captive raw material availability and moving further towards higher-value downstream products.

About company 

Godawari Power is an end-to-end integrated steel and energy company with a product portfolio spanning the entire value chain from captive iron ore mining, high-grade pellet production, to finished steel products, ferroalloys, power generation including renewables, and plans to diversify operations with a foray into containerised Battery Energy Storage Systems (BESS) solutions.