State-run Gail India plans to list its subsidiary Gail Gas and is aggressively investing in city gas distribution to create volumes before it takes the company to the market, a top company official said.
The Maharatna firm has planned a capital expenditure of Rs 54,000 crore, which it will spend over the next two-three years in laying of gas pipeline network that will feed households and industries such as fertiliser plants.
Out of this, Gail plans to invest Rs 12,000 crore in city gas distribution networks to retail Compressed Natural Gas (CNG) to automobiles and piped natural gas to households in towns such as Varanasi and Patna.
"Listing Gail Gas is in my mind and we had earlier thought about it. As of now, the subsidiary has reported a topline of Rs 5,300 crore and Rs 120-130 crore of profit.
"Last couple of years we have invested heavily in creating infrastructure alone and we believe we need to invest even more to get to the volume level," Gail India Chairman and Managing Director B C Tripathi told reporters here.
He said that apart from Bengaluru and Meerut, Gail Gas is now supplying gas to Mangalore, Rourkela, Cuttack, Bhubaneshwar and big cities like Varanasi, Patna, Jamshedpur, Bhopal among others.
"We believe that some more time will be required for bringing the company to the level of volume which will be well received by the market," Tripathi added.
Gail Gas, which was incorporated in May 2008, had participated in the 9th and 10th rounds of city gas distribution bidding and won in 15 and eight geographical areas, respectively.
Gail India has reported a 20 per cent rise in its March quarter net profit at Rs 1,222.23 crore from Rs 1,020.92 crore in the same period of the previous fiscal year.
Revenue rose to Rs 18,763.87 crore in the fourth quarter of 2018-19 fiscal year when compared with Rs 15,430.69 crore net profit in the year-ago period.