Market leader stock engaged in natural gas signs a Memorandum of Understanding (MOU) with Petron Scientech Inc for setting up a Bio-ethylene plant in India.
Share Price Variation
In Friday’s trading session, the share price of GAIL (Gas Authority Of India) Limited reached an intra-day high of Rs.235.55 per share from its previous close of Rs.234 apiece, gaining around 0.6 percent in the session.
What is the news
GAIL (India) Limited and Petron Scientech Inc. (Petron) have signed a Memorandum of Understanding (MoU) to collaborate on a 500 Kilotons per Annum (KTPA) bio-ethylene plant in India, along with its downstream units. The proposed project, based on bioethanol production, will be developed under a 50:50 Joint Venture (JV) partnership.
As part of the MoU, GAIL and Petron will conduct feasibility studies to evaluate the project’s technical and financial viability. Both companies aim to secure investment approvals from their respective management teams to move forward with the JV and project development.
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Management Commentary
Business Development Director of GAIL, Mr. Rajeev Kumar Singhal commented on the MOU that, “We are elated to enter into this strategic relationship with Petron, a pioneer in bio-ethanol to bio-ethylene technology. The MoU signifies a major step towards enhancing sustainable practices and advancing the bio-economy in India. The skills and strengths of both the companies would create a synergy for achieving the objective of MoU”.
Order Book
GAIL is advancing multiple projects, including the PDH-PP at Usar with a 500 KTPA capacity, 69.5 percent completed, and expected to begin commercial production by October 2025. The Polypropylene Plant at Pata, with a 60 KTPA capacity, is 87.4 percent complete, targeting completion within FY25.
The IPA project at Usar will conclude 24 months after licenser selection, which is ongoing. GAIL has rebranded JBF Petrochemicals as GAIL Mangalore Petrochemicals, expecting its 1,250 KTPA capacity plant to be operational by June 2025.
Capital Expenditure
GAIL’s Capex (Capital Expenditure) for Q1FY25 amounted to Rs.1,659 crore, with the total projected Capex for FY25 and FY26 estimated at Rs.11,450 crore and Rs.10,129 crore, respectively.
Financials
In the latest financial update, the company reported net sales of Rs.34,738 crore for Q1 FY25, reflecting a 6 percent increase from Rs.32,789 crore in Q1 FY24. Net profit surged to Rs.3,183 crore, an impressive 83 percent rise from Rs.1,739 crore in the same period last year.
Company Profile
GAIL (India) Limited is an India-based natural gas processing and distribution company, with segments including Transmission Services, Natural Gas Marketing, Petrochemicals, LPG and Liquid Hydrocarbons, and other segments.
Written by – Siddesh S Raskar
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