GAIL Plans Listing Gas Unit, Spending Rs 54,000 Crore In 2-3 Years
State-run GAIL (India) Ltd. plans to list its subsidiary GAIL Gas Ltd. and is aggressively investing in city gas distribution to create volume before it takes the company to the market, its chairman BC Tripathi said Tuesday.
The Maharatna firm has planned a capital expenditure of Rs 54,000 crore, which it will spend over the next two-three years in laying of gas pipeline network that will feed households and industries.
Out of the Rs 54,000 capex plan, GAIL (India) plans to invest Rs 12,000 crore in city gas distribution networks to retail compressed natural gas to automobiles and piped natural gas to households in towns such as Varanasi and Patna.
“Listing GAIL Gas is in my mind and we had earlier thought about it. As of now, the subsidiary has reported a topline of Rs 5,300 crore and Rs 120-130 crore of profit,” said BC Tripathi, chairman and managing director of GAIL (India), in Mumbai on Tuesday.
According to Tripathi, apart from Bengaluru and Meerut, GAIL Gas is now supplying gas to Mangalore, Rourkela, Cuttack, Bhubaneshwar and big cities like Varanasi, Patna, Jamshedpur and Bhopal, among others.
“We believe that some more time will be required for bringing the company to the level of volume which will be well received by the market,” Tripathi said.
GAIL Gas, which was incorporated in May 2008, had participated in the 9th and 10th rounds of city gas distribution bidding and won in 15 and eight geographical areas, respectively.
GAIL India reported a 20 percent rise in its March quarter net profit at Rs 1,222.23 crore from Rs 1,020.92 crore in the same period of the previous fiscal year.
Revenue rose to Rs 18,763.87 crore in the fourth quarter of 2018-19. That compares with Rs 15,430.69 crore net profit in the year-ago period.
On Tuesday, GAIL (India) shares gained 0.27 percent to Rs 349.30 apiece on the BSE while the benchmark Sensex rose 0.17 percent to close at a fresh record high of 39,749.73 points.