Gujarat Gas shares zoom ~14% on restructuring plans

2 Sep 2024 , 03:33 PM

Gujarat Gas shares rose as much as 13.6% to a new all-time high of ₹689.45 on the BSE after the company announced on Friday the restructuring of its group entities Gujarat State Petroleum Corporation (GSPC), Gujarat State Petronet (GSPL), and Gujarat Gas.

Under the restructuring, 10 equity shares of GGL would be issued for every 305 shares of GSPC owned by shareholders, whereas 10 shares of GGL will be issued for every 13 shares of GSPL held.

Furthermore, under the demerger strategy of the gas transmission company from GGL into the newly created corporation GSPL Transmission (GTL), one new GTL share will be issued for every three GGL shares owned.

The merging of GSPC and GGL, by uniting the interconnected businesses, will unlock commercial synergies, increasing the scale of operations and enhancing efficiency through optimal resource utilisation. The absence of related party transactions will boost GGL’s EBITDA and ROCE. The synergistic benefit will also boost the market share of the gas trading business while allowing for more targeted growth strategies in other energy sectors, according to the company’s application with the exchange.

Gujarat Gas is India’s largest city gas distribution company, supplying around 11 million cubic meters of natural gas each day. The company operates around 811 CNG stations and has served over 21.52 lakh homes, 15,200 business customers, and 4,400 industrial customers.

At around 1.25 PM, Gujarat Gas was trading 9.59% higher at ₹665.15, against the previous close of ₹606.95 on NSE. The counter touched an intraday high and low of ₹689.95, and ₹630.75, respectively.

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