GAIL (India) gains after clarification

GAIL (India) rose 0.5% to Rs 120.45, extending recent gains after the company issued clarification to the bourses.

The stock has added 2.03% in three sessions from a recent closing low of Rs 118.05 recorded on 17 February 2020.

With reference to media report titled, "GAIL to move TDSAT against AGR dues demanded by DoT: Report," GAIL (India) clarified after market hours on Wednesday, 19 February 2020, that it had received provisional assessment orders towards annual license fees in respect of IP-II license for several financial years from the Office of Controller of Communication Accounts, Department of Telecommunication (DoT), Ministry of Communications, Government of India.

DoT had submitted an allegedly total outstanding amount of Rs 1,83,076 crore including interests and penalty computed on the entirc revenues of the company, which were refuted by the company being an unrelated matter to the terms & conditions of the license.

Based on the legal opinion sought in this regard and facts of the case, the company is of the view, that the amount assessed in provisional assessment orders are legally not tenable. In this regard, the company has also filed an application with Supreme Court on 23 January 2020 for seeking clarification of the judgement passed.

Earlier the media reported that GAIL (India) is likely to appeal before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) against the Adjusted Gross Revenues (AGR) dues demanded by DoT.

The Supreme Court in its 14 February 2020 ruling has reportedly asked GAIL (India) "to seek appropriate remedy before the appropriate forum". This means the apex court is not asking GAIL to pay AGR dues like it has asked unified license telecom companies, the report said.

GAIL (India) is an integrated energy company in the hydrocarbon sector and is engaged in gas marketing. As of 31 December 2019, the Government of India held 52.68% stake in the company.

On a consolidated basis, the company's net profit jumped 12.93% to Rs 2,029.51 crore in Q3 December 2019 (Q3 FY20) as against Rs 1,797.04 crore reported in Q3 December 2018 (Q3 FY19). Revenue from operations declined 11.52% year-on-year (Y-o-Y) to Rs 17,898.16 crore in Q3 FY20.

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