Mahanagar Gas IPO Opens on 21st June 2016

Mahanagar Gas Limited is one of the largest city gas distribution (“CGD”) companies in India. Company has more than 20 years of experience in supplying natural gas in Mumbai and are presently the sole authorised distributor of compressed natural gas (“CNG”) and piped natural gas (“PNG”) in Mumbai, its Adjoining Areas and the Raigad district in the state of Maharashtra, India. Company is promoted by GAIL and BGAPH, each of who holds 49.75% of the Equity Shares. GAIL is a Maharatna public sector undertaking and the largest natural gas transmission company in India. BGAPH is headquartered in Singapore and is a part of the BG Group, an international exploration and production and LNG company.


for the Issue Details

for the IPO Note

 

Mahanagar Gas Limited (MGL), a JV between GAIL and British Gas, is coming with an IPO. Each promoter holds 45% stake and the rest is held by Govt of Maharashtra. Each of promoters is selling 12.34mn shares, total comprising 25% of the equity. Price band is Rs. 380‐421/share. MGL is a CGD player with operations in Mumbai, adjoining areas and Raigad. In FY16, MGL with a network of 4,646 km sold CNG through 188 CNG stations to 0.47 mn vehicle customers. It supplies PNG‐domestic to 0.86 mn households, PNG‐commercial to 2,866 customers and PNG‐industrial to 60 industrial companies.

IndiaNivesh Research Report

 

Mahanagar Gas : Step on the gas

Good demand prospects and assured supply for a chunk of its business lend strength

There is little not to like the initial public offer of city gas distributor Mahanagar Gas that opens on Tuesday. The company has near-monopoly in the supply of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai and surrounding areas.

There is good growth potential, and government policy support assures cheap domestic gas supply for the chunk of its business. Volume and revenue growth have been healthy over the years, and the balance sheet is robust with negligible debt and tidy cash reserves.

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