GSPC LNG Limited leaves Rs 89.80 crore interest unprovided

For the quarter and half year ended September 30, 2026, GSPC LNG Limited had not provided Rs 89.80 crore of interest on delayed payments to its engineering, procurement and construction contractor. The amount awaits final settlement after negotiations, while APSEZL's challenge to the Mundra terminal award remains before the Bombay High Court.

Why has GLL not provided Rs 89.80 crore of interest?

GLL has not made a provision for approximately Rs 89.80 crore of interest on delayed payments to its engineering, procurement and construction, or EPC, contractor as of September 30, 2026. Its EPC contract provides for interest on delayed payments, but also allows set-off against early payments made to the contractor.

Management said the amount will be finalised only upon the final settlement of accounts with the relevant parties after negotiation. As a result, the Rs 89.80 crore was not recorded as an expense or liability in the consolidated financial results for the quarter and half year ended September 30, 2026.

The independent auditor drew attention to this non-provisioning in its review report for the September 2026 results. The auditor said its conclusion on the consolidated financial results was not modified in respect of the matter, which means the review conclusion remained unmodified despite the disclosed uncertainty.

Gujarat Energy Limited, GLL's holding company, reported consolidated profit after tax of Rs 1,497.17 crore for the half year ended September 30, 2026, compared with restated profit after tax of Rs 935.62 crore for the corresponding half year of 2025. The filing identifies the interest issue separately and does not state a deadline for the negotiations.

What is the Mundra terminal dispute with APSEZL?

GLL developed a liquefied natural gas, or LNG, terminal at Mundra Port, where Adani Ports and Special Economic Zone Limited, or APSEZL, is the concessionaire. APSEZL developed shore protection, land reclamation, a jetty, power and water infrastructure, and provides port services under a sub-concession structure.

A preliminary agreement signed in September 2014 contemplated a sub-concession agreement and other project agreements, and GLL paid Rs 50 crore to APSEZL. Those project agreements remain unsigned because the parties dispute the commercial charges under them, according to the September 2026 filing.

To enable the terminal's commencement and continued peaceful operation, GLL and APSEZL entered into an interim settlement and arbitration agreement on December 24, 2019. GLL then paid Rs 666 crore in FY2019-20 as an ad hoc payment for the right to use the port facilities, an amount to be adjusted under the final award.

What did the final Mundra arbitration award mean for GLL?

The final arbitration award was received on August 30, 2025, after which GLL paid a Rs 157.22 crore balance to APSEZL. This payment followed APSEZL's statement of claim of Rs 1,747.55 crore dated July 8, 2020, although the filing does not disclose the tribunal's detailed calculation or reasoning.

GLL accounted for the Rs 157.22 crore balance in FY2025-26, allocating Rs 112.32 crore to capital expenditure, or capex, and Rs 44.90 crore to operating expenditure, or opex. This accounting treatment concerns the award-related payment and is separate from the Rs 89.80 crore delayed-payment interest that remains unprovided.

The disclosed payments span the Rs 50 crore preliminary-agreement payment in September 2014, the Rs 666 crore ad hoc payment in FY2019-20, and the Rs 157.22 crore post-award balance in FY2025-26. However, the source does not say that the unsigned project agreements or the underlying commercial-charge dispute have been fully resolved.

The wider regasification business reported revenue of Rs 242.94 crore in the half year ended September 30, 2026, up from Rs 145.11 crore in the restated corresponding half year of 2025. Its segment result changed to a Rs 16.80 crore profit from a Rs 75.52 crore loss, but the filing does not attribute that movement specifically to the Mundra terminal matter.

Is the Mundra arbitration award final and enforceable?

No, the award remains under challenge because APSEZL has challenged it under Section 34 of the Arbitration and Conciliation Act, 1996, before the Bombay High Court. The disclosure does not provide a hearing date, a court order, APSEZL's detailed grounds for challenge, or an expected resolution date.

The pending court process means the August 30, 2025 final award should be distinguished from final closure of the commercial dispute. GLL has paid the Rs 157.22 crore balance and recorded its capex and opex split in FY2025-26, but the filing does not state that the litigation has concluded.

GLL was listed as a subsidiary in the group's consolidated financial results as of September 30, 2026. The regasification segment held assets of Rs 3,447.72 crore on that date, compared with Rs 3,428.46 crore on September 30, 2025, while segment liabilities were Rs 3,111.62 crore compared with Rs 2,994.11 crore.

The auditors included both the unprovided Rs 89.80 crore interest and the Mundra dispute in an emphasis-of-matter section for the September 2026 review. Their unmodified conclusion does not determine the result of either the final EPC settlement or APSEZL's Section 34 court challenge.

Conclusion

GLL's September 2026 disclosure identifies two unresolved matters around the Mundra terminal: Rs 89.80 crore of EPC delayed-payment interest has not been provided pending negotiated settlement, and APSEZL's challenge to the August 2025 arbitration award remains before the Bombay High Court. The award-related Rs 157.22 crore balance was already accounted for in FY2025-26.

The next developments to watch are the final settlement of EPC accounts, including any contractual set-off for early payments, and progress in APSEZL's court challenge. The filing discloses neither a negotiation deadline nor a scheduled court hearing, leaving the timing and any further accounting effect unresolved.