Graphite India Informs BSE About Closing Its Bengaluru Plant
Graphite India conveyed to the Bombay Stock Exchange on Wednesday that the firm is permanently shutting its Whitefield, Bengaluru plant. The plant had been proved to be controversial as it contributed to a collapse in the share price of company over last few months.
Graphite India’s board passed a resolution on Tuesday approving the closure. The plant had come in for scrutiny from the Karnataka State Pollution Control Board and the National Green Tribunal. The closure is a big victory for Whitefield residents who had been protesting against the pollutants generated by the plant.
The company said there will be an impact on its balance sheet post-closure, as the Bengaluru plant accounts for 17% (Rs 508.64 crore) of its annual turnover. Graphite India has five factories in India and one in Nuremberg, Germany.
Share price of Graphite India hit ₹1,100 in August 2018
The company, in its letter to the BSE, recalled it had informed the exchange on February 2 when the NGT upheld KSPCB’s 2012 order for shutdown of the plant. The NGT’s final ruling came after the Supreme Court’s October 2018 judgement asking Graphite India to pay Rs 50 lakh in fines for pollution.
Graphite India makes graphite electrodes used in electric arc furnaces to make steel. With China stepping back on steel and graphite manufacturing following new green laws, Indian manufacturers like Graphite India have seen increased demand.
Graphite India’s share price, which had barely risen for years, began to rise sharply in early 2017 and touched a high of over Rs 1,100 in August, 2018. Following the troubles in the Bengaluru plant, the price crashed. On Wednesday, it fell 1.8% to close at Rs 451.
Graphite India, in its filing to the BSE, pointed to contradictions in the NGT order of January 1 asking for assessment and monitoring of pollution levels at its Bengaluru plant by a committee comprising the Central Pollution Control Board, National Environmental Engineering Research Institute and KSPCB. If the plant was to be shut down, how would the committee monitor pollution levels, Graphite India asked.
KSPCB had withdrawn consent for operations and issued a closure order on February 14, and by February 21, Graphite India had completely shut down operations in Bengaluru.