Indian Stock Market

Mahanagar Gas IPO

Mahanagar Gas Ltd, the company that provides piped gas to households and compressed natural gas to automobiles in Mumbai, is planning to make an initial public offer to raise funds, Managing Director P K Gupta said.

“The board will decide on an IPO at an appropriate time,” he said during a conference organised by Bombay Chamber of Commerce over the weekend. He did not divulge any details.

Mahanagar Gas is a joint venture between British Gas and GAIL India Ltd with both the companies holding a little over 49 per cent equity each with the Maharashtra government holding the remaining small portion. Subsequent to the IPO, the public shareholding is expected to be 20 per cent while Maharashtra government may hold 10 per cent.

Reports of the company going for an IPO were doing rounds a couple of years ago as well but it did not go ahead at that time. The company has made major strides in piped distribution of natural gas to households and commercial establishments despite facing several hurdles while laying the gas pipeline across the city. The company, which posted sales of Rs 700 crore, also supplies CNG to a large number of vehicles.

Gupta said the company has given over three lakh connections in the city and has plans to expand to areas outside Mumbai such as Dombivli, Kalyan, Navi Mumbai and nearby industrial areas.

The company, however, is facing problems in sourcing more gas or its expansion plans. It is planning to secure gas supplies from various sources including Reliance Industries, Gupta said.