Mahanagar Gas Ltd (MGL), an equal joint venture between GAIL India and British Gas, and with a monopoly in the compressed natural gas (CNG) and piped natural gas (PNG) business in Mumbai, is likely to go for a listing.
It will become the second city gas distribution company to get listed after Indraprastha Gas Ltd (IGL), that went for listing in 2003. IGL is the sole CNG and PNG supplier in Delhi and adjoining areas.
“Mahanagar Gas will go for a listing and we are working on it. However, no timeframe has been decided,” B C Tripathi, chairman and managing director, GAIL India, told Business Standard. MGL plans to double its reach among domestic consumers of PNG in five years. So far, MGL is present only in Mumbai and adjoining areas, but it is aiming to get authorisation for city gas distribution business in at least half a dozen other cities.
The company operates more than 2,600 km of pipeline network in Mumbai, Navi Mumbai and Thane. It is expanding in the adjoining areas of Kalyan-Dombivli, Ambernath-Badlapur, Tarapur and Panvel. “In the next five years, we expect to double our base of 460,000 domestic customers,” said Vipin Chandra Chittoda, managing director.
MGL plans to invest '340-350 crore in its business in 2010-11 and hopes to earn '1,400 crore this year. It expects this figure to double in five years. Sixty-five per cent of its revenue comes from the transport segment.
However, with the huge demand in other segments, this mix will change in the coming years, it says. The company operates 144 CNG stations in and around Mumbai and plans to take this to 250 in the next three years.
MGL supplies gas to 250,000 vehicles in Mumbai and its suburbs. It is converting the entire fleet of BEST (the Brihanmumbai Electric Supply & Transport Undertaking) buses to run on CNG. “We have entered into an agreement with BEST and devised a partnership where we would be providing them with CNG to convert their buses. We have already converted a few depots of BEST,” added Chittoda. At present, there are 2,600 BEST buses plying on CNG, to increase to 4,000 in two years.