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Gail may pick up BG’s 65% stake in Gujarat gas

15 Nov 2011 Evaluate

Gail India is eyeing the controlling stake in British gas major BG’s subsidiary in Gujarat, the country’s biggest natural gas market, as the state-run company prepares to compete with oil major BP and Reliance in the gas marketing business. BG, one of the first western companies to invest in India’s energy sector, is selling its 65% stake in Gujarat Gas Co (GGCL), the country’s largest private sector gas transmission and distribution firm.

BG had acquired the stake for Rs 170 crore in 1997, while the current market value of the company is about Rs 5,000 crore. The two companies are already partners in Mahanagar Gas, which distributes gas in Mumbai. Gail has been scouting for opportunities to expand its city gas distribution (CGD) business, which is very profitable as natural gas works out much cheaper than petrol and diesel. For households, piped gas is competitively priced and saves consumers the trouble of booking and replacing LPG cylinders.

GAIL India Share Price

157.80 -1.10 (-0.69%)
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Peers
Company Name CMP
GAIL India 157.80
Gujarat Gas 362.60
Indraprastha Gas 169.25
Mahanagar Gas 1125.45
Adani Total Gas 632.90
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