The stock price of the largest gas transmission and marketing company in the country Gas Authority of India (Gail) breached the 52-week high of Rs 81.50 on talks of it being interested in Dabhol Power Company (DPC). However it fell to Rs 77.70 at the end of the day, up 7.54 per cent on the Bombay Stock Exchange.
Analysts feel the rise in the scrip may also be attributed to the company's interest in acquiring a stake in bankrupt energy giant Enron Corp's troubled DPC.
The stock has been giving stellar performances over the last four-and-a-half months, having risen 65.7 per cent from Rs 43.60 on 17 September 2001 to Rs 72.25 on 1 February. Volumes increased to 92,548 shares from 3,055 in the same period.
Analysts say the rise in the scrip is purely on account of value buying. They say the scrip has been fuelled by the company's solid performance for the quarter ended December 2001 as well as the positive sentiment towards stocks of public sector undertakings (PSUs).
Analysts, however, feel that the rise in the scrip is not due to enthusiasm over divestment, as the company is not in the government's disinvestment list. They say the government, even if it plans to divest in Gail, wouldn't think it wise to bring down the stake below 51 per cent. The government holds around 86 per cent stake in Gail. Analysts believe the government may undertake an IPO or international tender, if it decides on reducing stake in Gail.
For the third quarter ended 31 December 2001, the company posted an impressive 25.77 per cent jump in net profit to Rs 306.22 crore compared to Rs 243.48 crore in the corresponding period last year. Total income increased by 9 per cent to Rs 2,753.20 crore from Rs 2,528.77 crore in DQ 2000. During the third quarter, 98 per cent of total revenues was from gas processing and sales and the remaining 2 per cent was from LPG transportation.
