Indraprastha Gas Ltd (IGL), which owns 50 percent in Central UP Gas Ltd and Maharashtra Natural Gas Ltd, plans to wholly own both the joint ventures, Managing Director E S Ranganathan said.
Indraprastha Gas plans to buy out its partners in the joint ventures — state-run GAIL India Ltd and Bharat Petroleum Corp — to drive the company’s expansion in western and central India. GAIL and BPCL officials weren’t immediately able to comment.
The acquisitions will help the country’s second-biggest gas distributor tap into a widening market as Prime Minister Narendra Modi’s administration seeks to increase the share of the cleaner fuel to 15 percent by 2020 from 6.5 percent. The company is aiming to add a record 300,000 new piped gas customers in the year ending March as India pushes more urban households to use natural gas and help free up liquefied petroleum gas for rural users.
Indraprastha Gas expects the acquisitions to boost sales volumes by 2.5 million cubic metres a day, against the 4.5 million it sells now in Delhi and its adjoining suburbs.
The company aims to complete one of the acquisitions this year, Ranganathan said. It will fund the purchases with cash generated from existing operations. Indraprastha Gas has about Rs 800 crore ($123 million) in spare cash.
“We have enough cash right now and we may not need to borrow,” he said.
Source: Business-Standard