German Green Steel Expansion More Than Doubles Core Capacity

German Green Steel and Power Limited plans a Rs 348.1358 crore expansion at Samakhiyali, Kutch, that would more than double the summed nameplate capacity of sponge iron, MS billets and TMT bars to 907,500 metric tonnes per annum by December 2027. The project combines steelmaking equipment with 5.4 MW of wind and 2.5 MW direct-current solar generation.

How will German Green Steel's expansion change capacity?

German Green Steel plans to raise the summed nameplate capacity of its three disclosed Samakhiyali products by 445,500 metric tonnes per annum, or MTPA, from 462,000 MTPA to 907,500 MTPA. Sponge iron capacity would rise from 66,000 MTPA to about 148,500 MTPA, MS, or mild-steel, billet capacity from 214,500 MTPA to 412,500 MTPA, and thermo-mechanically treated, or TMT, bar capacity from 181,500 MTPA to 346,500 MTPA.

The largest proportional increase is in sponge iron, which would add 82,500 MTPA, equal to 125% of its current 66,000-MTPA capacity. The proposed induction furnace would add 198,000 MTPA of billet capacity, while the rolling mill would add 165,000 MTPA of TMT-bar capacity. Sponge iron is an iron-making input used in electric and induction furnaces, while billets are semi-finished steel products that can be rolled into bars and other sections.

German Green Steel attributes the proposed additions to a kiln, induction furnace, continuous casting machine, rolling mill, structural mill, scrap shredder and epoxy-zinc coating line. A continuous casting machine turns molten steel into billets for subsequent rolling. The company says it recorded high capacity utilisation in sponge iron, MS billets and TMT bars over the preceding three fiscals, although the document does not disclose product-level utilisation percentages.

What does the German Green Steel project cost and how is it funded?

German Green Steel estimates the Project cost at Rs 348.1358 crore, including goods and services tax. Plant and machinery accounts for Rs 241.2761 crore, utilities for Rs 52.2529 crore, building and civil work for Rs 47.7806 crore, and contingency for Rs 6.8262 crore. The Project is planned on 574,956 square metres of company-owned Samakhiyali industrial land, so the cost estimate carries no land or land-development allocation.

The Rs 97.0734 crore kiln is the largest quoted equipment package, followed by the Rs 52.2529 crore hybrid power plant, Rs 49.56 crore rolling mill and Rs 47.082 crore structural mill. The Project also includes a Rs 18.06 crore induction furnace, a Rs 12.7702 crore epoxy-zinc coating line and a Rs 8.9805 crore shredder unit. The structural mill is intended to add structural-steel sections, while the coating line is intended to enable coated TMT bars.

German Green Steel proposes to use Rs 226.3305 crore of net fresh-issue proceeds for Project capital expenditure. By August 31, 2026, the company had deployed Rs 62.4101 crore, comprising Rs 26.7263 crore from pre-IPO placement proceeds, Rs 5.079 crore from internal accruals and Rs 30.6048 crore from an HDFC Bank Limited term loan. HDFC Bank sanctioned a Rs 90 crore term loan on July 3, 2026, and the company expects to use a further Rs 59.3952 crore from that facility for the Project.

The financing and timetable depend on the fresh issue, the remaining HDFC Bank funding and procurement at estimated prices. The cost estimate is based on vendor quotations and a detailed project report dated September 11, 2026, but has not been appraised by a bank or financial institution. German Green Steel also states that it has not placed final orders for certain capital-expenditure items, meaning vendors, prices and delivery timing may change.

How will German Green Steel reduce reliance on grid electricity?

German Green Steel plans a hybrid power plant comprising two wind turbine generators of 2.7 MW each, or 5.4 MW in total, and a 2.5 MW direct-current, or DC, solar park. The Rs 52.2529 crore utility package is intended to reduce dependence on electricity supplied by state electricity boards as manufacturing capacity rises. DC is the rating convention used for the solar plant in the Project disclosure.

The company sourced 80.75% of its electricity consumption from captive and hybrid generation in Fiscal 2026, compared with 75.09% in Fiscal 2025 and 46.76% in Fiscal 2024. Captive generation represented 75.44% of consumption in Fiscal 2026, while hybrid generation represented 5.31%; purchased grid electricity accounted for the remaining 19.25%. In Fiscal 2024, purchased electricity had represented 53.24% of total consumption.

As of August 31, 2026, German Green Steel had 16 MW of coal-based captive power and 4 MW of waste-heat recovery capacity at Samakhiyali. Its disclosed installed renewable capacity included 17.1 MW of wind and 13.2 MW DC of solar across Bhavnagar and Bharuch. The company also expected a separate 5.4-MW Bharuch wind project and 3.6-MW DC solar plant to be commissioned by December 31, 2026.

What must happen for production to begin in December 2027?

German Green Steel targets commercial production in December 2027, following a trial run scheduled for October and November 2027. The schedule calls for civil and building work from October 2026 to April 2027, machinery procurement from March to June 2027, installation of mechanical, electrical and plumbing equipment from June to August 2027, and installation, testing and commissioning through September 2027. The company says kiln civil work started in October 2025.

The Project has an environmental clearance dated April 25, 2025, a Gujarat Pollution Control Board consent to establish valid until February 2, 2030, and a provisional consent order dated October 10, 2025 that is valid until September 28, 2032. German Green Steel says it will apply for approvals required at relevant later stages. It also warns that delayed approvals, raw-material or equipment availability, workforce availability, cost changes and market conditions could require revisions to spending or timing.

Separate from Project spending, German Green Steel proposes to use Rs 769.99 lakh of net proceeds to prepay or repay borrowings. The indicated facility is a Vivriti Capital Limited unsecured borrowing with Rs 8.085 crore outstanding on August 31, 2026 and an interest rate of 12.85% a year at that date. Any allocation for general corporate purposes remains to be finalised, although it cannot exceed 25% of gross fresh-issue proceeds under Securities and Exchange Board of India regulations.

Conclusion

German Green Steel's Samakhiyali plan is a linked production and power investment: the disclosed steelmaking additions would lift summed capacity by 445,500 MTPA, while the new 7.9 MW hybrid renewable project is intended to limit grid dependence. The outcome depends on completing the kiln, furnace, casting, rolling and power systems within the Rs 348.1358 crore estimated Project cost.

The next disclosed milestones are the December 31, 2026 expected commissioning of earlier Bharuch renewable additions, machinery procurement between March and June 2027, and the December 2027 commercial-production target. German Green Steel has not placed final orders for some Project requirements and has disclosed that quotation values, vendor selection, approvals and funding needs may change before completion.