Ahmedabad: British oil and gas company BG Group Plc. is looking to divest some or all of its stake in its subsidiary Gujarat Gas Co. Ltd (GGCL), India’s largest private natural gas transmission and distribution firm.
BG Group has informed GGCL, in which it has a majority stake, that it has initiated a process towards divesting its shareholding in the firm, the Ahmedabad-based company said in a filing to the Bombay Stock Exchange on Tuesday.
A GGCL spokesperson refused to comment. Mint could not ascertain how much stake BG Group wants to divest.
The London-based company, through BG Asia Pacific Holdings Pte Ltd, holds 65.12% in GGCL. Foreign institutional investors own 15% and the public, 9%. The balance stake is with mutual funds and Indian institutions.
GGCL’s market capital based on Tuesday’s closing price of Rs 418.50 a share is Rs 5,367 crore.
BG Group’s stake in it is valued at Rs 3,495 crore.
BG Group acquired stake in GGCL in 1997 from the Mafatlal Group and Gujarat Industrial Investment Corp., who held around 48% and 15%, respectively. It paid Rs 180 crore for this stake, an industry executive close to the matter said on condition of anonymity.
BG Group holds other energy assets as well in India.
It runs a joint venture, Mahanagar Gas Ltd, with Gail (India) Ltd, each holding 49.75%. The Maharashtra government holds the balance stake.
BG Group also owns a 30% stake in the mid and south Tapti gas fields and another 30% in the Panna-Mukta oil and gas fields.
Two months ago, it struck a deal with Gujarat State Petroleum Corp. Ltd for long-term supply of up to 2.5 million tonnes per annum of liquefied natural gas.
The GGCL scrip dropped 4.6% on BSE on Tuesday in an unchanged overall market.
“This announcement will have no effect on the day-to-day business of the company,” managing director Shaleen Sharma said in a statement.
GGCL distributes 3.5 million metric standard cubic meter per day of natural gas to close to 350,000 industrial, commercial, domestic and compressed natural gas consumers. It manages a pipeline network of 3,900km and 42 CNG stations.
Last week, the Gujarat government filed a reference before the Competition Commission of India (CCI) following complaints from the Surat Textile Association over price hikes by GGCL for natural gas.
“In the last few years after receiving many complaints from people, it has come to the notice of state government that GGCL has raised the CNG prices arbitrarily and has been selling it at a very high price, despite having it sourced at a very low price,” the state government said in a statement last week.
CCI, which heard the matter on Tuesday, has sought more details both from the association and the state government, said the industry official quoted earlier.