Mahanagar Gas surges 7% to hit 52-week high on acquisition of Unison Enviro

Shares of Mahanagar Gas (MGL) rallied 7 per cent to hit a 52-week high of Rs 969.60 in Monday’s intra-day trade, after the company signed agreement to acquire 100 per cent stake in city gas distributor (CGD) Unison Enviro (UEPL) for Rs 531 crore. The stock of state-owned CGD company surpassed its previous high of Rs 931.45, which it had touched on February 16, 2023.

The company has signed a Share Purchase Agreement (SPA) with Unison Enviro Private Limited (UEPL) and existing shareholders of UEPL (Ashoka Buildcon Ltd. and an investment fund managed by Morgan Stanley India Infrastructure) to acquire 100 per cent stake in UEPL.

UEPL has been authorised by PNGRB to implement the CGD network in Geographical Areas (GAs) of Ratnagiri, Latur & Osmanabad in the state of Maharashtra, and Chitradurga & Devengere in the state of Karnataka.

The acquisition of shareholding of UEPL is subject to Petroleum and Natural Gas Regulatory Board (PNGRB) approval. The objects of acquisition were to enter new geographical areas to pursue inorganic growth opportunities.

“This acquisition will enable MGL to expand to newer geographical areas in Maharashtra (Ratnagiri, Latur & Osmanabad) and Karnataka (Chitradurga & Davanagere), thereby, providing new avenues for long term growth. The transaction is of strategic importance to MGL and the extended footprint would help the company to scale its future business development activities across a larger network and customer base,” MGL said.

MGL has been supplying Natural Gas by way of Compressed Natural Gas (CNG) to vehicles and Piped Natural Gas (PNG) to domestic, commercial, and industrial consumers in Mumbai, Navi Mumbai, Thane, including adjoining areas and Raigad district.

Technical View

Bias: Positive

Target: Rs 1,090

Support: Rs 934; Rs 921

Following today's sharp 8.5 per cent rally, the stock is seen trading above the higher-end of the Bollinger Bands on the daily chart. Hence, the near-term bias is likely to remain positive as long as the stock sustains above Rs 934.

In the process, the stock has also broken above its 100-WMA (Weekly Moving Average) placed at Rs 922 and the higher-end of the weekly Bollinger Bands at Rs 936. This further re-enforces the positive bias at the counter. 

On the upside, the stock could rally all the way towards its monthly trend line resistance at Rs 1,090-level.

Meanwhile, on the downside, apart from the support at Rs 934, the Rs 921-level is also likely to act as strong support.

(With inputs from Rex Cano)