|Chennai||Rs. 24470.00 (1.37%)|
|Mumbai||Rs. 24900.00 (0.97%)|
|Delhi||Rs. 24200.00 (1.26%)|
|Kolkata||Rs. 24160.00 (0%)|
|Kerala||Rs. 24000.00 (0.63%)|
|Bangalore||Rs. 23800.00 (0%)|
|Hyderabad||Rs. 24140.00 (1.17%)|
Adani Gas, a wholly owned subsidiary of Adani Enterprise Ltd, will soon buy a 20 per cent stake in Green Gas, a joint venture between Indian Oil Corporation and GAIL India. Adani will buy the equity from the Aditya Vikram Birla Group and financial institutions IDFC and UTI, which together hold 50 per cent stake in Green Gas.
Executives in Adani Gas and Green Gas said both companies were in the final stage of sealing the valuations. SBI Capital Markets had been asked to evaluate the assets of both.
Adani has been in talks for some time now to buy the 20 per cent stake — it signed a memorandum of understanding to do so in August 2011 — and has had issues over the asset valuations, Green Gas executives said.
The executives said Green Gas is valued around Rs 95 crore on Wednesday and a 20 per cent stake would cost Rs 19 crore.
GAIL India and IOC hold 22.5 per cent each in the company, while Uttar Pradesh State Industrial Development Corporation holds five per cent.
A senior executive from Adani Gas said, "We did not agree to the valuation methodology being used. Valuations are on assumptions. Besides, being a public sector company, they need various documents and clearances to be in place. This is taking time. We, along with IOC and GAIL, are open to the deal and we hopefully will finalise it by the end of this financial year."
Adani Gas' interest stems from the fact that both companies operate in the city gas distribution (CGD) business in north India. "It is in the best interest of both the parties to join hands, rather than fighting it out for market share," a senior Adani Gas official said. Green Gas supplies city gas and compressed natural gas in Agra and Lucknow in Uttar Pradesh. Adani Gas operates in Ahmedabad and Vadodara, supplying natural gas to industrial and domestic customers. It is also present in Faridabad, Haryana, through its CGD business.
“We will merge our assets with Green Gas. Since both of us were in the same city, we decided to work together, so that there is no hassle. Also, now, wherever we go, we will go together,” Rajeev Sharma, chief executive officer, Adani Gas, had earlier told Business Standard.
Adani had spent around Rs 65 crore to lay steel and plastic pipelines for around 60 km in Lucknow. The company, however, had to suspend work midway, as it failed to source gas and was subsequently forced to stop work after intervention by the Petroleum and Natural Gas Regulatory Board in 2009.