Gujarat State Petronet’s Concerns Ease As Parent’s Debt Declines: Motilal Oswal

Gujarat State Petronet’s Concerns Ease As Parent’s Debt Declines: Motilal Oswal

Gujarat State Petronet Gas pipelines. (Image: Company website)

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Motilal Oswal Report

Gujarat State Petronet Ltd. has a 54% stake in Gujarat Gas Ltd., which amounts to a market capitalization of Rs 197 billion, much higher than Gujarat State’s m-cap at Rs 156 billion.

Major concerns for the above anomaly have been -

1. expected decline in tariffs of the company due to over-utilization of the high pressure grid, and

2. concerns over the usage of cash.

Gujarat State Petroleum Corporation, the parent company of Gujarat State Petronet with a 37.6% stake, has traditionally been a debt ridden company, raising concerns whether the cash generated by Gujarat State Petronet may be used to reward minority shareholders.

Click on the attachment to read the full report:

Motilal Oswal Gujarat State Petronet Company Update.pdf
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