MUMBAI : Shell India, the local arm of Royal Dutch Shell Plc, on Tuesday sold its 10% stake in the city gas distribution business of Mumbai-based Mahanagar Gas Ltd (MGL) for 770 crore.

According to stock exchange data, BG Asia Pacific Holdings, a wholly owned subsidiary of Shell, sold 9.98 million shares through block deals at 780 each.

In 2016, Shell took over BG Group Plc and, subsequently, acquired its assets worldwide.

On 4 March 2019, Mint had reported about Shell’s plan to exit MGL.

When Mahanagar Gas was listed on 1 July 2016, Shell acquired a 34% stake in the company through BG Asia Pacific.

Last year, it offloaded 24% of its shareholding in two tranches—8.5% in April and 14% in August—in the open market through bulk deals.

This reduced Shell’s holding to 10%. With the latest stake sale, the company has exited the city gas business in India.

Guidelines issued by capital markets regulator Securities and Exchange Board of India (Sebi) stipulate minimum promoters’ contribution shall be locked in for three years from the date of allotment in a public issue.

With the lock-in period ending, Shell has decided to sell its stake and focus on other businesses in India.

Other key shareholders of Mahanagar Gas are state-run gas utility GAIL (India) Ltd and the Maharashtra government.

Mahanagar Gas sells compressed natural gas (CNG) to retail outlets and piped natural gas (PNG) to households and industries in and around Mumbai.

Founded in 1995, Mahanagar Gas sells CNG to over 700,000 retail outlets and piped natural gas to over 1.17 million households.

The company runs more than 240 CNG retail outlets and plans to add 20 CNG stations each over the next two years.

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