BPCL approved MGNL IPO
BPCL – MGNL IPO – The state-owned refiner BPCL has granted in-principle approval for an Initial Public Offering (IPO) of Maharashtra Natural Gas Ltd (MNGL), a joint venture with GAIL and Indraprastha Gas (IGL).
In response to reports of a planned Rs 1,000 crore IPO, the company confirmed that the board has approved the proposal, pending regulatory and other necessary approvals. According to an report, BPCL, GAIL India, and IGL are preparing to list their joint venture city gas distribution company in the upcoming fiscal year.
Currently, IGL holds a 50% stake in MNGL, while BPCL and GAIL each hold 22.5%. The Maharashtra government owns the remaining 5% stake through the Maharashtra Industrial Development Corporation (MIDC).
The IPO will consist of an offer for sale (OFS) and a fresh issue. Through the OFS component, IGL, the largest shareholder, will partially divest its shareholding. MNGL serves Pune, Pimpri-Chinchwad, and surrounding areas, with plans to expand into other districts in Maharashtra, Karnataka, and Telangana. The company provides compressed natural gas (CNG) for the transportation sector and piped natural gas (PNG) for domestic, commercial, and industrial use.
In the last financial year, MNGL achieved its highest-ever revenue of Rs 3,001.88 crore. EBITDA increased by 41% to Rs 961.53 crore, and net profit rose by 45% to Rs 610.12 crore, resulting in an earnings per share (EPS) of Rs 61.01. As of the end of FY24, MNGL had installed 246 CNG stations, established 846 industrial and commercial connections, and provided 858,000 domestic piped natural gas connections. MNGL is set to become the sixth pure-play city gas distribution player to be listed on the market.
MNGL’s IPO plans are being announced during a challenging time for the city gas distribution sector, which is currently facing a 20% gas supply cut due to the administered price mechanism (APM). This cut is particularly impactful as CGDs are receiving gas from older fields that are experiencing a natural decline.
In response to concerns about potential stock price fluctuations, BPCL has clarified that there was no specific event or information that could have caused significant movement in the stock on January 5 and 6.
The market reaction to this news was evident on Monday, with shares of both BPCL and GAIL India dropping by over 3%.
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.