Mumbai: A day ahead of its public issue, Mahanagar Gas Ltd (MGL), the sole supplier of natural gas in Mumbai and its adjoining areas, on Monday raised 309.36 crore by allotting shares to anchor investors, the company said in a stock exchange filing.

MGL sold 7.34 million shares to 25 institutional investors at 421 per share, the upper-end of the 380-421 price band. The public issue will close on 23 June.

The anchor book is that portion of the IPO that bankers allot to institutional investors on a discretionary basis. Anchor-book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.

Investors who acquired shares in anchor allotment include Morgan Stanley Mauritius Company Ltd, Merrill Lynch Capital Markets Espana S.A. S.V., DB International Asia Ltd, BNP Paribas Arbitrage, Franklin Templeton Asset Management (India) Pvt. Ltd, Reliance Capital Trustee Co Ltd, National Westminster Bank Plc, Abu Dhabi Investment Authority, First State Investments (Hong Kong) Ltd, Amundi Funds Equity India, SBI Life Insurance Co Ltd, and ICICI Prudential AMC Ltd among others.

Through its IPO, the natural gas distributor plans to raise 1,040 crore. The proceeds of the IPO will go to the two holding companies, which will offload 12.5% stake each. The government of Maharashtra holds 10% stake in the company. Post offer, the shareholding of GAIL (India) and BG Asia will drop to 32.5% each.

The 25% stake sale by MGL will make the company compliant with the Securities and Exchange Board of India’s (Sebi) minimum public shareholding norms.

In October 2014, Sebi had asked all listed public sector undertakings (PSUs), excluding public sector banks (PSBs), to raise public shareholding to a minimum 25% by August 2017. For state-owned companies looking to list after October 2014, the market watchdog allowed three years’ time from the date of listing.

At present, GAIL (India) and BG Asia own 45% each in MGL, which was incorporated in 1995. Kotak Mahindra Capital Co. Ltd and Citigroup Global Markets India Pvt. Ltd is managing the share sale.

MGL sells CNG and PNG in Mumbai and its adjoining areas, including Raigad district in Maharashtra. The company currently has nearly 850,000 customers for PNG that includes households and commercial customers, while nearly 470,000 vehicles run on CNG sold by the company through a network of 188 stations.

MGL said it is looking to expand in both domestic and well as industrial and commercial segments. The company reported revenue of 2,135 crore in 2014-15, up from 1,885 crore in the previous year. Profit grew marginally to 301 crore in 2014-15, from 297 crore in the previous year.

For 2014-15, CNG and PNG businesses accounted for 65.1% and 34.9% of MGL’s total gas sales revenue, respectively. As of 30 June 2015, MGL had 180 CNG filling stations. For 2014-15, CNG and PNG businesses accounted for 65.1% and 34.9%, respectively, of MGL’s total gas sales revenue.

MGL’s initial share sale is the 11th so far this calendar. So far this year, 10 companies have raised 6,743 crore through the IPO route, while last year 21 companies raised 13,614 crore, according to data from primary market tracker Prime Database.

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