 "Mahanagar IPO opens today; draws market attention")
Mahanagar Gas (MGL) IPO, which will open for subscription today and close three days later, is garnering the limelight of market analysts.
The second biggest CNG retailer in India aims to raise around Rs. 1040 crore through IPO. Promoted by state-run GAIL and British Gas Asia Pacific Holdings, the gas distributor firm has fixed price band of Rs. 380-421 per share.
British Gas and GAIL will sell up to 12,347,250 equity shares each in the IPO.
According to ICICIdirect.com, Mahanagar Gas presents an opportunity to have an exposure to the robust business model and growing city gas distribution (CGD) space. CNG and domestic PNG business verticals constitute 85.6% of sales volumes for MGL.
The brokerage firm believes the company's strong CGD network offers good demand potential due to lower CNG, residential PNG penetration and increased usage of gas for industrial volumes.
MGL has a city gas infrastructure network of 188 CNG filling stations with a compression capacity of 3.1 million kg/day in FY16, providing CNG to over 0.47 million vehicles.
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The company supplied PNG to nine lakh domestic customers, 2866 commercial and 60 industrial customers in FY16, through an integrated pipeline network of over 4686 km which includes 415 km of steel and 4231 of polyethylene pipeline.
It has exclusive gas distribution rights in Mumbai till 2020, adjoining areas of Thane and Navi Mumbai till 2030 and Raigad district till 2040.