Adani Gas spurts after CCI approves Total Group's 37.4% stake-buy

Adani Gas surged 10.13% to Rs 164.65 after the Competition Commission on Thursday approved the acquisition of 37.4% shareholding and joint control by Total Group in Adani Gas.

On 14 October 2019, the Adani Group company said that it had signed definitive agreements with Total S.A., a French multinational integrated oil and gas company, to deepen their existing partnership and commitment for developing multi-energy offerings to the Indian energy market.

As per the deal, Total S.A. will acquire a 37.4% stake in Adani Gas. The French energy giant will buy 25.2% stake from shareholders via an open offer and the remaining shares from Adani Family.

Total will launch an open offer to buy up to 25.2% equity, or 27.71 crore shares of Adani Gas from public shareholders at a price of Rs 149.63 per share for an aggregate price of Rs 4,147 crore. The open offer commences on Friday, 6 December 2019 and will close on Thursday, 19 December 2019.

The Adani family and Total shareholders shall ultimately hold 37.4% each and public shareholders shall hold remaining 25.2%.

The partnership and equity support from the partners will help Adani Gas accelerate project executions in all its new geographical areas. Adani Gas shall also pursue fuel retail business in India and target to setup 1,500 fuel stations offering top of the line products in the coming years.

Adani Gas reported 137% jump in consolidated net profit to Rs 120.06 crore on a 11.7% increase in net sales to Rs 472.57 crore in Q2 September 2019 over Q2 September 2018.

Adani Gas is developing city gas distribution (CGD) networks to supply the piped natural gas (PNG) to the industrial, commercial, domestic (residential) and compressed natural gas (CNG) to the transport sector.

On the technical front, the stock's RSI (relative strength index) stood at 83.45. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock trades above its 50-day and 200-day moving average (DMA) placed at Rs 143.24 and Rs 140.32 respectively.

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