Betting on India’s clean energy push, French oil and gas major Total SA has acquired a 37.4% stake in Adani Gas Ltd, promoted by the Adani Group, for Rs5,662 crore, the company said in a statement on Monday.
The acquisition is the largest foreign direct investment in India’s city gas distribution sector, with the deal giving Total joint control of Adani Gas.
Total, the world’s second-largest liquefied natural gas company, will purchase 37.4% stake in Adani Gas through a tender offer to public shareholders to acquire up to 25.2% shares subject to applicable regulations and purchase the residual shares from the Adani family, the press statement added.
This means the Adani family and Total SA shareholders will eventually hold 37.4% stake each and public shareholders will hold the remaining 25.2%.
On Monday, shares of Adani Gas traded at Rs154.40 on BSE, up 12.2% from previous close. At current share prices, the deal works out to over ₹5000 crore.
The expanded partnership will develop regasification terminals, including Dhamra LNG, on the east coast of India, market liquefied natural gas (LNG) domestically, and through Adani Gas target to distribute gas to 7.5% of India’s population. This strengthens the partners’ commitment to making big strides towards India’s vision of promotion of natural gas and clean energy.
As part of the existing joint venture, Adani and Total in the coming years will also target to build a fuel retail network of 1,500 stations along highways and intercity connections.
Adani Gas will also set up 1,500 compressed natural gas (CNG) stations for gas distribution over the next 10 years in its and its joint venture’s geographical areas in 71 districts, 68 towns spread across 15 states in India.
The Adani family currently owns a 74.8% stake in Adani Gas, which was listed on the bourses on 5 November, 2018.
Last October, Total signed a memorandum of understanding (MoU) with the Adani Group to form a joint venture for running liquefied natural gas (LNG) regasification terminals at Mundra and Dhamra and roll out 1,500 fuel stations over ten years to tap demand in the world’s fastest-growing energy market.
India is the world’s largest energy market after China and the US but is the fastest growing among the three, expanding at 5%. The government has outlined plans to more than double the share of natural gas in India’s overall energy mix from 6.2% to 15% by 2030 driven by abundant supply, competitive pricing, infrastructure expansion and regulatory initiatives to tackle stringent emission norms and meet global climate change commitments.
India is investing over $60 billion in building a gas pipeline and terminal infrastructure to support demand and growth, Oil Minister Dharmendra Pradhan said on Sunday.
Adani Gas is India’s biggest private city gas distribution company with exclusive authorisation to develop infrastructure, operate and market gas in 38 geographical areas and supply piped natural gas to residences, commercial and industrial units as well as CNG to automobiles, catering to about 7.5% of India’s population covering 71 districts in 15 states.
Source: Mint