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Adani Gas Ltd. slated to be the largest CGD Company in India

Posted On: 2018-11-07 12:59:28

Adani Gas Ltd, the gas distribution arm of the Adani Group, today announced its listing on the stock exchanges in a bid to become the largest city gas distribution (CGD) company in India and unlock its value for existing shareholders. As part of the listing process, Adani Gas has allotted equity shares to existing shareholders of Adani Enterprises at 1:1 ratio. Following the listing, the Adani Group owners will hold 74.92 percent stake in Adani Gas whereas retail and institutional investors will hold 3.36 percent and 21.72 percent respectively.

To leverage India's rapidly growing gas market, Adani Gas has planned to invest over Rs 8,000 crores in the next 5 years to consolidate its position as the largest private company in the sector. It is noteworthy that India's current CGD consumption is about 15-18% of domestic gas production and even at peak demand, consumption will be around 25-30%.

In FY 2017-18, Adani Gas reported turnover of Rs. 1,395 crore and EBITDA of Rs. 374 crore. AGL's volumes increased by 17% to 479 mmscm (million metric standard cubic metres) y-o-y. The company achieved a y-o-y volume growth of 12% in CNG segment and 23% in PNG segment.

Gautam Adani, Chairman, Adani Group stated, "Natural gas is one of the fastest growing sectors globally along with renewable energy. The Government of India has set a target to increase the share of natural gas in India's primary energy mix to 15% by 2022. Its wider adoption can help India fulfil the Honorable Prime Minister's vision to raise the quality of life of our people by improving the nation's exposure to clean and green energy for household and industrial purposes. With the listing of AGL we aim to be the largest CGD Company in the country in next five years and have a more focused approach for creating substantial value for our shareholders and fulfill our national energy imperatives. Listing AGL is another strategic move towards India's vision of achieving a gas-based economy".

The group currently runs city gas distribution (CGD) networks at Ahmedabad, Vadodara, Faridabad and Khurja. It has won rights to set up CGD networks at 13 cities in India. In addition Adani Gas Joint Venture with Indian Oil will have 18 more geographical areas to expand CGD business. AGL's network size currently stands at 6,000+ km pipeline and 70 CNG stations catering to more than 3.15 lakh households, 1,250 industrial units and 2,400 commercial units.

With the Government planning to offer additional geographical areas for gas distribution next year coupled with rapid urbanisation, AGL expects to impact approx. 10% of the population by 2023.


Source: Equity Bulls

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