The Delhi High Court’s ruling in favour of city gas utility Indraprastha Gas Ltd (IGL), in its case against the Petroleum & Natural Gas Regulatory Board (PNGRB), may benefit the valuation of Gujarat Gas, said industry players and analysts.
IGL had moved court after the gas regulator asked it in April to cut down its network tariff by 63 percent. Also, in a retrospective decision, PNGRB asked the company to refund the difference to its customers for the period from April 1, 2008, until the date of issuance of the order.
Analysts said the verdict may force Gujarat State Petroleum Corporation (GSPC) and its partners, Oil and Natural Gas Corporation and Bharat Petroleum Corporation, to revise their offer to buy a 65.12 per cent stake in Gujarat Gas Corporation (GGCL).
GSPC and its consortium partners had offered Rs 3,800 crore to Rs 3,900 crore for the stake. But BG wants around Rs 4,500 crore for its stake.
Shares in IGL surged 28.7 per cent after the news. Stocks in Gujarat Gas and Petronet LNG rose 14 and nine per cent, respectively.
“We expect the PSU consortium to revise its offer. This verdict is positive for IGL and also for GGCL. There will be an upside in stock price for sure,” said Kamlesh Kotak, head of Asian Market Securities.
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A consortium member said though the market had responded positively, the consortium would take some time to study the implications and weigh if the offer needed a revision. “We think PNGRB will not sit tight. It will certainly appeal in the higher court. If that happens, well and good. Else, we will see if the offer needs a revision at all,” said the consortium member.
“When we made the offer, it was not based on IGL’s case. So, we will have to study if it will have any impact at all now,” he said.
However, consortium members have been maintaining since April that the IGL case has impacted the valuations of GGCL.