Gujarat Gas surges on merger with gas distributors

Reuters Market Eye - Shares in Gujarat Gas Company Ltd rose as much as 13.1 percent, heading towards their biggest single-day gain since August 12, 2013 after its board approved a proposed merger with other state-run companies involved in city gas distribution business.

GSPC Distribution Networks, GSPC Gas, Gujarat Gas Financial Services and Gujarat Gas Trading Co are proposed to be merged with the Gujarat Gas Company, it said in a statement on Monday.

Analysts tracking the sector say the proposed merger with gas distributors would boost the company's valuations in line with rival state-run Indraprastha Gas Ltd .

Gujarat Gas is trading at 8.3 times of its 12-month forward earnings while Indraprastha is trading at 9.5 times, according to Thomson Reuters data.

 

(Reporting by Abhishek Vishnoi)