IDF buys 20% in Gujarat Petronet

The private equity fund may raise holding at a later stage

Infrastructure private equity fund India Development Fund (IDF) on Thursday picked up a 20.5 per cent stake in gas transmission firm Gujarat State Petronet Ltd (GDPL) for Rs 90 crore.

GSPL, a subsidiary of the Gujarat State Petroleum Corporation Ltd (GSPC), is involved in developing energy transportation infrastructure and connecting natural gas supply basins and LNG terminals to growing markets.

The deal translates into IDF picking up 7.20 crore equity shares at Rs 12.50 per share in GDPL. The value of each share is Rs 10 at a premium of Rs 2.50 per share.

As part of the deal, Darius Pandole, chief operating officer of IDF, handed over a cheque of Rs 90 crore to chief minister Narendra Modi on Thursday afternoon.

Pandole said GSPL is one of the first public sector company with private sector equity and it was an opportunity for IDF to be associated with the gas laying project in Gujarat.

"We might consider increasing our stake in GSPL at a later stage. At present we have picked up a 20 per cent stake," he said.

IDF has a corpus of over Rs 850 crore and is promoted by the Infrastructure Development Finance Corporation (IDFC) with the support of the ministry of finance, government of India, State Bank of India, Life Insurance Corporation of India, Bank of Baroda and Union Bank of India.

Modi said this is the first time that a state government undertaking is partnering with IDFC.

The credibility of GSPL is evident from the fact that although the pipeline has not been laid completely, IDF has picked up stake in the company. Pandole said there is no specific profit sharing agreement between the companies.

The state government is in the process of laying the gas grid for transmission of gas to industries, domestic and commercial customers.

The plan involves laying of gas pipeline for over 2,200 km. GSPL has completed over 350 km pipeline from Hazira to Kalol near Mehsana.

In the second phase, cities like Mehsana, Rajkot, Morbi, Bhavnagar, Pipavav and Vapi will be connected.

GSPl's natural gas operations in Gujarat are an effort in leveraging highly-integrated energy resources.

At present GSPL transports more than nine million metric standard cubic metres per day (MMSCMD) of gas, including three MMSCMD of LNG and the company has already invested in excess of Rs 1,000 crore.