Gujarat Gas Jumps Over Two-Year High On Merger Announcement
The Gujarat government will merge these companies into Gujarat Gas Ltd., which will focus on gas production, exploration, and distribution.
Shares of Gujarat Gas Ltd. surged nearly 14% to over a two-year high on Monday after the government announced it will GSPC Energy Ltd., Gujarat State Petronet Ltd., and Gujarat State Petroleum Ltd. into Gujarat Gas Ltd.
The Gujarat government will merge these companies into Gujarat Gas Ltd., which will focus on gas production, exploration, and distribution. Later, it will demerge the natural gas transmission business, which will be called GSPL Transmission Ltd. This process will conclude by August 2025, the company said in an exchange filing on Friday.
The aim is to simplify the corporate structure of the group and provide a unified platform to fund future growth through this merger, the exchange filing said.
Gujarat Gas Ltd. will need to issue additional 78.66 crore shares for the new entity, according to the NDTV Profit calculation.
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Shares of Gujarat Gas surged 13.67%, and rose to Rs 689.95, the highest level since Feb. 8, 2022. It was trading 10.22% higher at Rs 669.00 as of 9:46 a.m., compared to 0.39% advance in the NSE Nifty 50 index.
The stock gained 58.47% in last 12 months and 45.18% on year to date basis. Total traded volume so far in the day stood at 42 times its 30-day average. The relative strength index was at 69.30.
Out of 32 analysts tracking the company, 13 maintain a 'buy' rating, two recommend a 'hold,' and 17 suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 13.9%.
