“The Petroleum and Natural Gas Regulatory Board (PNGRB) vide letter dated June 29, 2020 had accepted proposal for transfer of authorization of Amritsar District GA and Bhatinda District GA from Gujarat State Petronet to Gujarat Gas,” the company said in an exchange filing.
The company is required to submit revised financial closure, gas supply agreement and PBG (performance bank guarantee) to PNGRB to complete the process of transfer.
Accordingly, PNGRB has permitted the company to take over activities of laying, building, operating or expanding CGD (city gas distribution) network of Amritsar District GA and Bhatinda District GA, it said.
In the last one month, the stock has appreciated by 35 per cent, against 8 per cent rise in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 1.7 million equity shares changing hands on the NSE and BSE so far.
Analysts believe that an increase in both compressed natural gas (CNG) and industrial piped natural gas (PNG) demand will drive Gujarat Gas’ volume growth in the long term. However, both segments may stay under pressure in April-June 2020 quarter (Q1FY21).
“Currently, sales volumes are at 5.5 mmscmd, down 45 per cent from pre-Covid level. In H1FY21E, we expect report volume de-growth with growth set to be seen from Q3FY21E onwards. In the long term, increase in volumes driven by regulatory tailwinds, further penetration in existing geographical areas (GAs) and aggressive expansion in newly acquired gas will lead to sustainable growth,” analysts at ICICI Securities said in results update.