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MOSL: OIL & GAS-Answering growth conundrum for Mahanagar Gas

Oil & Gas: Answering growth conundrum for Mahanagar Gas

 

• Mahanagar Gas (MAHGL) had come up with its IPO in July 2016. Post the IPO, both GAIL and Br itish Gas (BG) had 32.5% stake in the company.
• BG reduced its stake in MAHGL from 32.5% to 10% by August 2018. It is likely to fully exit after the end of the lock-in period in June 2019.
• This opens up an interesting win-win situation for both MAHGL and GAIL. None of the companies have announced it so far. We highlight this as a possibility though.

 BG to exit completely post June 2019

• Post MAHGL's IPO in July 2016, both GAIL and BG had a 32.5% stake in the company. A total of 20% of the promoters' post-IPO holding has a lock-in of three years, which expires in June 2019, according to the SEBI ICDR regulations.
• Prior to the IPO, Shell had announced the acquisition of BG in 2015. As part of Shell's strategy, BG appears exiting MAHGL completely.
• BG sold off its 8.5% stake in MAHGL in April 2018, followed by another 14% in August 2018. It now holds 10%, the minimum according to the SEBI ICDR lock-in requirements. We expect BG to exit completely post June 2019.