The shares of the leading gas distribution company gained up to 14 percent after the company’s board of directors approved a scheme of arrangement and amalgamation.
With a market capitalization of Rs 45,323.61 crore, the shares of Gujarat Gas Ltd were trading at Rs 659.95 per share, increasing around 9 percent as compared to the previous closing price of Rs 606.70 apiece.
Reason for rise:-
Today the company shares of the company have seen bullish movement after Gujarat Gas Ltd’s board of directors approved a scheme of arrangement and amalgamation involving Gujarat State Petroleum Corporation (GSPC), GSPC Energy (GEL), and Gujarat State Petronet (GSPL) merging into GGL.
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Additionally, the scheme involves the demerger of GGL’s gas transmission business, which will be listed separately as GSPL Transmission Limited (GTL).
Moreover, the combination of GSPC and GGL, by uniting the interconnected companies, will unlock business synergies, increasing the size of operations and enhancing efficiency via optimal resource use.
The absence of related party transactions will boost GGL’s EBITDA and ROCE. The synergistic impact will also boost the market share of the gas trading industry, allowing for targeted expansion plans in other energy sectors.
Additionally, the primary goal of the demerger is to maintain regulatory compliance, unleash potential value for GSPL owners, and allow the firm to expand independently. The resultant firm, GSPL Transmission Limited (GTL), will list equity shares on the stock exchange.
Financial Performance:-
Looking forward to the company’s financial performance, revenue increased by 18 percent from Rs 3,782 crore in Q1FY24 to Rs 4,450 crore in Q1FY25. During the same period, net profit increased by 53 percent, from Rs 215 crore to Rs 330 crore.
Footprint:-
The firm distributes 11 million cubic meters per day of natural gas through more than 810 CNG stations and 22 lakh PNG connections. The company’s steel/MDPE pipeline network of about 40,200 kilometers serves six states and one union territory, with 27 CGD authorizations.
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Company Profile:-
Gujarat Gas Limited is a city gas distribution company that sells, purchases, supplies, distributes, transports, and trades natural gas, compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), and other gaseous forms via pipelines, trucks/trains, or any other suitable mode of transportation/distribution.
Written by:- Abhishek Singh
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