Gujarat Gas Company fell 5.55% to Rs 387 at 11:58 IST on BSE after the company said its board has approved consolidation of its entities.
The company made the announcement after market hours on 21 April 2014.
Meanwhile, the BSE Sensex was up 26.29 points, or 0.12%, to 22,791.12.
On BSE, so far 76,000 shares were traded in the counter, compared with an average volume of 57,652 shares in the past one quarter.
The stock hit a high of Rs 417.30 and a low of Rs 383.25 so far during the day. The stock hit a 52-week high of Rs 426.20 on Monday, 21 April 2014. The stock hit a 52-week low of Rs 159 on 7 August 2013.
The stock had outperformed the market over the past one month till 21 April 2014, rising 57.93% compared with the Sensex's 4.65% rise. The scrip had also outperformed the market in past one quarter, rising 60.34% as against Sensex's 7.12% rise.
The mid-cap company has an equity capital of Rs 25.65 crore. Face value per share is Rs 2.
Gujarat Gas Company announced that its board approved the amalgamation and arrangement between the company, Gujarat Gas Financial Services (GFSL), Gujarat Gas Trading Company (GTCL), GSPC Gas Company (GSPC Gas) and GSPC Distribution Networks (GDNI).
As per the scheme, the company, GFSL, GTCL, and GSPC Gas would be amalgamated with GDNL. All assets and liabilities of the company, GFSL, GTCL and GSPC Gas would be transferred to GDNL. The appointed date of the scheme would be 1 April 2013.
In consideration of the amalgamation, GDNL will allot 1 equity share for every 1 equity share of GGCL. Similarly, it will allot 1 equity share for every 1 equity share of GFSL.
GDNL will allot 81 equity shares for every 76 equity shares of GSPC Gas. GSPC Gas holds 44.45% of the total issued, subscribed and paid-up share capital of GDNL, which shall get extinguished.
The company holds 69.88% and 100% of the total issued, subscribed and paid-up share capital of GFSL and GTCL respectively. Since the company, GFSL and GTCL are the transferor companies, the shares held by the company in GFSL and GTCL shall get extinguished. Accordingly, no new shares of GDNL shall be issued in lieu of such shares getting extinguished, the company said.
Currently, GSPC Gas, GSPL and GSFC holds 44.45%, 38.89% and 16.66% paid up capital of GDNL respectively. Further, the existing Issued, Subscribed and Paid up Capital of GDNL will be reduced.
The scheme will be filed with the stock exchanges where the shares of the company are listed as per Sebi circular dated 4 February 2013 and 21 May 2013 for receiving their comments to the scheme. The scheme is subject to other necessary statutory approvals, including sanction of the High Court of Gujarat.
According to media reports, shares of Gujarat Gas Company are under pressure as the consolidated entity may drag profitability and it is likely that the company can turn from a net cash company to debt.
On a consolidated basis, Gujarat Gas Company's net profit rose 29.3% to Rs 90.65 crore on 2.4% rise in net sales to Rs 774.92 crore in Q4 December 2013 over Q4 December 2012.
Gujarat Gas Company, a subsidiary of GSPC Distribution Networks (GDNL), currently distributes approximately 2.8 million metric standard cubic meter per day (mmscmd) of natural gas.
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