GAIL Gas Ltd has commenced the process of appointing investment banks for an initial public offering that could raise up to ₹3,100 crore. According to a document reviewed by Mint, the city gas distribution company, a wholly owned subsidiary of state-run GAIL (India) Ltd, is seeking up to four book-running lead managers to manage the proposed share sale. As reported by Mint, the company is planning on conducting a pre-bid meeting with all interested merchant bankers this week to address their queries, with bids expected to start coming in by early next month.
The IPO is part of India's Asset Monetisation Pipeline 2.0, under which government-owned companies will divest stakes in their subsidiaries between fiscal year 2027 (FY27) and FY30. According to Mint, NITI Aayog's February report had projected the GAIL Gas IPO for FY28. The appointed advisers will draft and file the draft red herring prospectus and final prospectus with the Securities and Exchange Board of India (Sebi) and stock exchanges, as well as oversee the appointment and work of transaction intermediaries including domestic and international legal counsel and registrars.
Incorporated in 2008, GAIL Gas is a wholly owned subsidiary of GAIL and was set up to implement city gas distribution projects in the country. As reported by Mint, it currently operates CGD projects in 16 geographical areas across nine states, including Madhya Pradesh, Haryana, Rajasthan, Chhattisgarh and Karnataka. The company is also pursuing city gas business in Andhra Pradesh, Goa and Assam. GAIL Gas plans to acquire six geographical areas from its parent for a proposed consideration of around ₹1,500 crore, expecting these areas to have strong growth potential and contribute to its scale of operations.
During FY26, GAIL Gas reported turnover of ₹12,681 crore, up from ₹12,229 crore in FY25. According to Mint, the company and its joint ventures completed 191,000 domestic PNG connections and added 120 CNG stations during the year. However, credit rating agency India Ratings noted in a 26 April report that amid the ongoing Middle East conflict and resultant reduction in LNG shipments, gas supplies to industrial customers have curtailed, which may impact industrial customer volumes in the near term. The agency expects this impact to be partly mitigated by relatively stable and higher-margin CNG volumes supported by priority gas allocation and continued expansion of CNG infrastructure.
