GOCL’s Subsidiary Faces CIL Ban Over Supply Shortfall

On July 4, 2024, GOCL Corporation Limited announced in a stock exchange filing the significant developments regarding its subsidiary, IDL Explosives Limited (IDL), and its relationship with Coal India Limited (CIL).

According to the filing, CIL, through a letter dated July 2, 2024, has imposed a 2-year ban on IDL for participating in any contract or order awards by CIL or its subsidiaries. This action stems from IDL’s failure to meet a tender condition related to stipulated local content in their supplies. Despite this ban, current contracts for the supply of cartridge explosives and accessories until May 2025, and bulk explosives until October 2025, remain unaffected.

In response to these developments, the Board of Directors of GOCL Corporation convened to deliberate on the matter. The Board acknowledged the challenges posed by inadequate domestic supply of ammonium nitrate, a critical raw material for explosives manufacturing, which necessitated imports to ensure continuous supply to CIL. Despite the ban, GOCL’s subsidiary expressed confidence in presenting a strong case to CIL authorities, aiming for a favourable resolution.

The Board emphasised that the current issue is not expected to immediately impact the operations or financials of GOCL Corporation or its subsidiary. However, it highlighted the necessity for a thorough review and deliberation at the Board level to address the implications and plan future actions. The company remains optimistic about resolving the matter with CIL in a mutually beneficial manner, underscoring its commitment to maintaining business continuity and meeting contractual obligations.

While facing challenges in supply chain dynamics and regulatory compliance, GOCL Corporation reiterates its focus on proactive management and strategic engagement to mitigate risks and uphold operational stability in its explosives segment.

About GOCL Corporation Limited

GOCL Corporation Ltd is involved in mining and infrastructure services, energy, and real estate. It is part of the prominent Hinduja Group, which has a presence across several industries, such as information technology, automotive, infrastructure projects and development, media, entertainment, and communications, power, oil and speciality chemicals, healthcare and real estate.

On July 5, 2024, the share price of GOCL Corporation Ltd opened at ₹463.00, touching the day’s low at ₹448.95, as of 10:02 AM on the NSE.

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