Gujarat Gas Shares Surge 14% Following Group Restructuring Announcement: Is it a Good Investment?
As part of the restructuring plan, GGL will issue 10 equity shares for every 305 shares of GSPC held by shareholders. Additionally, in the merger of GSPL with GGL, 10 shares of GGL will be issued for every 13 shares of GSPL.
Gujarat Gas
Shares of Gujarat Gas Ltd surged by 14% on Monday, with Gujarat State Petronet Ltd (GSPL) also experiencing gains following the announcement of a restructuring plan. The scheme involves the merger of Gujarat State Petroleum Corporation (GSPC), GSPL, and GSPC Energy (GEL) with Gujarat Gas. Analysts pointed out that the merged entity will subsequently demerge the transmission business into a new company, GSPL Transmission Limited (GTL). The entire process is anticipated to be finalised by August 2025.
Gujarat Gas shares rose by 13.69% to ₹689.45, while GSPL shares increased by 1.45% to ₹448.80. Under the restructuring plan, Gujarat Gas will expand its portfolio to include profitable gas trading and additional businesses in exploration and production (E&P), renewables, gas-based power generation, and LNG terminals. Conversely, post-restructuring, GSPL will focus solely on transmission.
Approval from SEBI and stock exchanges is anticipated by December 2024, with shareholder and regulatory approvals expected by March 2025. Shares issued under the scheme will be distributed within a month of receiving all approvals; at this point, trading of GSPL shares will be suspended. The additional shares of Gujarat Gas and the new listing for GSPL Transmission Limited (GTL) are set to be finalised by August 2025.
Analysts highlighted that GSPL Transmission will manage the pipeline assets separated from GSPL. The primary aim of the merger is to streamline the complex holding structure and unlock the value of Gujarat Gas Ltd’s shares currently held by GSPL.
Shareholders of GSPC will receive 10 shares of Gujarat Gas for every 305 shares they hold, while shareholders of GSPL will receive 10 shares of Gujarat Gas for every 13 equity shares they own. Following the merger, Gujarat Gas’s gas transmission business will be spun off into a new entity, GSPL Transmission Limited (GTL), which will be listed separately. For the demerger, one share of GTL will be issued for every three shares of Gujarat Gas. The merger will take effect on April 1, 2024, and the demerger is scheduled for April 1, 2025.
