Mahanagar Gas aims to raise R1,039 cr from IPO, fixes `380-421 price band

Mumbai, June 14: Gas distributor Mahanagar Gas has priced its initial public offering (IPO) aimed at raising `1,039 crore (when calculated at the upper end of the price band), between `380-`421per share. The IPO which opens on June 21, is an offer for sale (OFS) of over 2.46 crore shares by existing promoters including GAIL India and BG Asia Pacific Holdings (a part of Royal Dutch Shell).

Both promoters hold 49.5% each of the total equity share capital of thecompany which will be brought down to 32.5% each post completion of the issue. About 60% of the issue will be reserved for the qualified institutional buyers (QIB) category, 15% will be reserved for high net-worth individuals (HNIs) and 35% of the offer will be open for retail investors. Anchor book allottment for the issue will be open on June 20.

In FY16, the company reported a total revenue of `2121 crore, lower 0.6% than `2135 crore reported in FY15. However, the company saw a 2.5% increase in its profit after tax at `308 crore in FY16 compared to `301 crore reported in FY15. Given its FY16 ear nings, the company is commanding an earnings multiple of 10.9 and 12.1 times for the upper and lower price range.

The company is the largest distributor of piped natural gas (PNG) and compressed natural gas (CNG) in Mumbai, its adjoining areas and Raigad district in Maharashtra. Kotak Mahindra Capital Company and Citigroup Global Markets India are the book running lead managers to the issue.

Shares of GAIL India closed 1.65 points higher at `372.55 on Tuesday prior on the announcement of Mahanagar Gas’ IPO during market hours.