Adani Gas spurts as France's Total to acquire 37.4% stake

Adani Gas surged 13.66% to Rs 156.45 after the company said it signed definitive agreements with France's Total S.A.

Adani Gas and Total S.A., a French multinational integrated oil and gas company, have signed definitive agreements to deepen their existing partnership and commitment for developing multi-energy offerings to the Indian energy market. City gas distribution is a natural extension of the plans of both partners to invest in infrastructure and assets worth over $1 billion, which span Liquefied Natural Gas (LNG) infrastructure and marketing and fuel retail business, announced in October 2018. This demonstrates both partners' commitment to this important partnership and confidence in Adani Gas as the leading gas distribution player and commitment to the government's vision to provide benefits of piped natural gas and CNG to 70% populations of the country.

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 has launched 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 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, the largest infrastructure conglomerate in India, and Total, the world's second largest LNG private player, will serve the fast growing gas demand of the Indian market. The expanded partnership will develop regasification terminals including Dhamra LNG, on the East coast of India; market LNG to the Indian markets and through Adani Gas, target to distribute gas to 7.5% of India's population. This strengthens the partners' commitment to make big stride towards India's vision of promotion of natural gas and clean energy mix.

Both partners would make significant investments in the next 10 years across the businesses to develop India's gas infrastructure, distribution, marketing businesses with presence in over 15 states reaching out to approximately 7.5% of India's population and setting up global scale and world class LNG, gas distribution and fuel retail infrastructure in India.

As part of the existing joint venture, Adani and Total in the coming years will target to build a fuel retail network of 1,500 retail stations, on the main roads of the country, such as highways and intercity connections. Adani Gas will also be setting up 1,500 CNG stations for gas distribution over the next 10 years in its and its joint ventures' geographical areas across 71 districts, 68 towns across 15 states in India.

In addition, Adani Gas and its joint venture will distribute gas to 6 million households in the next decade. Adani Gas CNG network will be developed exploring synergies including co-location of fuel retail and CNG outlets.

Meanwhile, the S&P BSE Sensex was up 87 points or 0.23% to 38214.29.

On the BSE, 4.23 lakh shares were traded in the Adani Gas counter so far compared with average daily volumes of 89,211 shares in the past two weeks. The stock hit a high of Rs 162.4 and a low of Rs 152 so far during the day.

The stock hit a 52-week high of Rs 184.25 on 04 Jun 2019. The stock hit a 52-week low of Rs 70.2 on 05 Nov 2018.

On a consolidated basis, Adani Gas' net profit rose 44.02% to Rs 79.31 crore on a 20.93% increase in net sales to Rs 450.56 crore in Q1 June 2019 over Q1 June 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.

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