Indraprastha Gas and State-run GAIL today touched a record high of Rs. 614.90, up 5.8 percent intraday ahead of the launch of Mahanagar Gas' initial public offer (IPO).
Shares of GAIL also gained nearly two percent intraday Tuesday with both stocks rallying on the back of valuation that is likely to get by Mahanagar Gas through its IPO.
According to grey market, the IPO price is likely to be at around Rs. 485 and additionally there is a premium of over Rs. 100. Mahanagar Gas' PE is 19 times more as compared to Indraprastha Gas.
Accordingly, the market capitalisation is expected to be around Rs. 4,800-4,900 crore at Rs. 485
apiece. FY15 diluted earnings per share can be at Rs. 30.54 and price-to-earnings at 16 times.
Its EPS in previous financial years has not seen much change. FY12 EPS comes at Rs. 31.2, FY13 at Rs. 30.28 and FY14 at Rs. 30.15 after assumption of expected IPO price, as the company has not seen any growth in profit in last four years.
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On the other hand, Indraprastha Gas, which primarily operates in the Delhi-NCR, is the sole authorized distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai.
MGL is promoted by GAIL and BG Group, which holds 49.75 percent stake each in the company.