Mumbai: Mahanagar
Gas Limited (MGL) is coming out with an Initial Public Offering (IPO) of about
2.47 crore equity shares. The promoter of the company, GAIL India and British
Gas Asia Pacific Holdings Pte Ltd (BGAPH) are selling 1.23 crore shares each.
The issue size is expected to be around Rs 1,040 crore (assuming subscription
at Rs 421). However, since no new shares are being issued, MGL will not receive
any funds from the offer. All the proceeds from the issue will go to the
promoters.
Not more than 50 percent of the issue will be
allocated to qualified institutional buyers. Further, at most 15 percent of the
issue will be available for non-institutional bidders and the remaining 35 percent
for retail investors.
Mahanagar Gas has raised Rs 309.3 crore from more
than 20 anchor investors by selling shares at a price of Rs 421
apiece — the higher end of the IPO price band, as per a filing to the
stock exchanges. The company has allotted over 73.48 lakh shares to
anchor investors, including BNP Paribas, Morgan Stanley, Abu
Dhabi Investment Authority, Merrill Lynch Capital Market,
DSP BlackRock and SBI Life Insurance Company.
Mahanagar Gas is one of the largest city gas
distribution (CGD) companies in India with over 20 years of experience in
supplying natural gas (NG) in Mumbai. MGL is presently the sole authorized
distributor of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in
Mumbai, its adjoining areas and Raigad district in Maharashtra.
The issue will open for subscription of June 21 and
will close on June 23. The company has set price band of Rs 380-Rs 421 for the
issue.
The company is well placed in Mumbai, as the sole
authorized CNG/ PNG distributor. The company has infrastructure exclusivity and
established infrastructure network. According to Centrum Wealth, an increase in
cost of natural gas or decline in gas allocation could affect operations.
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