British Gas has sold 10 percent stake for over Rs 700 crore held in Mumbai-based Mahanagar Gas Ltd (MGL), through a block deal on the bourses today. The company had around 98 lakh shares in the natural gas distribution company.
UK's leading energy and home services firm British Gas has sold all of its holdings, or a 10 percent stake, in Mumbai-based Mahanagar Gas Ltd (MGL) through a block deal on the bourses today.
Mahanagar Gas was listed on July 2016 at Rs 540 per share with GAIL and British Gas holding 32.5 percent stake each in the company. While GAIL still holds its 32.5 percent stake in the company, British Gas has been selling its stake since April 2018.
The company sold 8.5 percent stake in MGL in April 2018, at Rs 909.66 per share. Post that it divested 14 percent of its stake at Rs 854.54 per share in August 2018. The 10 percent stake sale today was the last of its holding in MGL.
Since listing, the stock has risen 62.6 percent till date. The stock hit its 52-week high of Rs 1,057.20 on March 29, 2019, and a 52-week low of Rs 754.70 on July 22, 2019.
“The stake sale could, however, have a technical overhang on the stock as we had seen during the earlier two tranches of stake sale in April and August 2018," Jefferies had said in a report dated March 2019.
The company has shown consistent growth since listing. Its net profit rose over 38 percent from Rs 393.4 crore in FY17 to Rs 546.39 in FY19. In Q1FY20, its net profit rose 32.6 percent to Rs 170.24 crore as compared to Rs 128.33 crore a year ago.
46 new CNG stations will come on-stream in FY20 with 6,000 CNG vehicles added every month. Also, BEST has ordered 500 CNG buses, which will further drive CNG growth, helping the company to grow.
Edelweiss expects the company's EBITDA margin to continue to lead the industry, with MGL showing the highest flexibility. "While we have trimmed our CNG volume growth assumptions to 6 percent, shift to CNG from diesel due to BSVI remains an upside risk to volumes. With an attractive valuation, we maintain ‘BUY’ with a revised target price of Rs 1,002 per share," they added.
Mahanagar Gas is a joint venture between state-run gas utility GAIL (India) Ltd, British Gas, and the Maharashtra government. As per the June-quarter shareholding pattern, GAIL holds 32.5 percent, BG 10 percent and the remaining 57.5 percent is held by public shareholders, which include the Maharashtra government and financial institutions.
Shares of Mahanagar Gas (MGL) rose over 11 percent after British Gas exited the company.