Mahanagar Gas

The Road Ahead of Mahanagar Gas

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Mahanagar Gas: India’s leading natural gas distributor

Founded in 1995, Mahanagar Gas sells piped natural gas (PNG) to households and industries and compressed natural gas (CNG) to automobiles in and around Mumbai. It sells PNG to over 1 million households and CNG to over 600,000 vehicles. The company runs more than 220 CNG retail outlets.

State-run gas utility GAIL (India) Ltd, BG Asia Pacific, and the Maharashtra government are the joint owners of Mahanagar Gas, where BG has 10%, GAIL holds 32.5% and the remaining is held by public shareholders, which includes financial institutions and Maharashtra government.

Shell India offers to sell 10% stake

The local arm of Netherlands-based Royal Dutch Shell Plc, Shell India has offered to sell its 10% stake for over 700 crores held in the city gas distribution business of Mahanagar Gas Ltd (MGL) which is Mumbai based company through a block deal on the bourses.

On 1 July 2016, Mahanagar Gas was listed; Shell, through its wholly-owned subsidiary. BG Asia Pacific Holdings Pvt.Ltd acquired a 34% stake in the company.  It sold 24% of its shareholding in two divisions, 8.5% in April and 14% in August in the open market through bulk deals. This deal reduced Shell’s holding to 10%. Shell took over BG Group Plc and later, acquired its assets worldwide in 2016.

As the lock-in period ends, after July 2019 Shell wants to focus on other businesses in India and had decided to sell its stake in Mahanagar Gas. Securities and Exchange Board of India guidelines of capital markets regulator stipulate minimum promoters’ contribution shall be locked in for three years from the date of allotment in the public issue.

Increase in the share value

On 20 August 2019, the shares of the company jumped about 10% on the National Stock Exchange. Going ahead, volume performance would remain a key monitorable for the stock.  Recently, concluded in June quarter, MGL’s volume performance wasn’t impressive. Lower than street expectation the overall volumes of the company increased by 3.3% year-on-year.

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