GAIL is taking the lead and there is a possibility that at least two other firms including ONGC may join it in bidding for Gujarat Gas
State-owned Indian Oil Corp, ONGC, GAIL and Oil India Ltd, besides Adani Group, are interested in buying BG Group's stake in Gujarat Gas Ltd but find Rs4,000 crore asking price too expensive.
Gas utility GAIL, explorers ONGC and Oil India, besides fuel retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum, have shown interest in buying BG Group's 65.12% stake in India's largest natural gas distributor by sales, industry sources said.
Other firms interested include Adani Group and Gujarat State Petroleum Corp (GSPC) but Cairn India is not keen. Sources said the public sector firms are keen on forming a consortium to jointly bid for the stake in Gujarat Gas that sells gas to about 325,000 residential, commercial and industrial customers through a pipeline network of about 3,850 km in Gujarat.
GAIL, which is the largest city gas player in the country, is taking the lead and there is a possibility that at least two other firms including ONGC may join it in bidding for Gujarat Gas.
Sources said GAIL however is finding the valuation being proposed for the 65.12% stake as too high. If feels Rs 4,000 crore that is being quoted for the stake was 16 times the expected Rs 250 crore net profit of Gujarat Gas and eight times an asset replacement ballpark estimate of between Rs 400 and 500 crore.
There is a possibility of Adani Group bidding with IOC. The two firms had bid together for city gas licences. Alternatively, Adani may go with GSPC, with whom it has a working relationship.
BG Group has hired Citigroup Inc to advise on a potential sale of its stake in Gujarat Gas Co Ltd (GGCL).
Sources said while the state-owned firm see synergy in acquring GGCL as they either have produce natural gas or are its retailers but Cairn may not be interested as the company's business model is completely different.
Cairn believes in high risk, high reward ventures and gas retailing is not on its radar currently. Besides GGCL, BG also holds a 49.75% stake in Mahanagar Gas Ltd, which sells CNG and piped gas in Mumbai.
Sources said BG has not yet put MGL stake on offer but may decide to do so after GGCL. BG has already exited from all but one exploration asset in the country. It is left with just one exploration block in Krishna Godavari basin and has a 30% interest Panna/Mukta and Tapti oil and gas field with ONGC (40%) and Reliance Industries (30%).
On Thursday, IOC closed at Rs252.90 per share on the Bombay Stock Exchange, 0.08% up from the previous close.
Tata Motors Vice-Chairman Ravi Kant said: "We are maintaining the break-even timeline as far as numbers are concerned, we are on line."
Admitting that Nano has 'wasted an early opportunity' due to teething problems, Tata Group chief Ratan Tata today said Tata Motors will do everything to undo the tag of 'poor man's car'.
In an interaction with media here, Tata, who is also the Chairman of Tata Motors, said: "Many efforts were made to discredit the product. We never pushed it (Nano) as a poor man's car, but as an affordable family car. Whatever stigma is there in the market, we will undo it."
When asked about the problems Nano has faced, like the fire incidents and the recent replacement of starter motors, Tata said the issue was mainly due to various parts coming from different vendors.
"Current upgrade should help resolve the problem... upgrade will resolve issue relating to problematic supply from vendors. Upgrade will also resolve the earlier issues and also take in customer feedback. We will look at variants of models to move up the value chain," he said.
Asked about the break-even timeline for the Nano project, Tata Motors Vice-Chairman Ravi Kant said: "We are maintaining the break-even timeline as far as numbers are concerned, we are on line."
On a query on whether Tatas will go back to West Bengal again, Tata said: "I do not think our position has changed...As and when the hostilities are over and (if) we get an amicable reception, we will think of it."
On Thursday, Tata Motors closed at Rs201.55 per share on the Bombay Stock Exchange, 0.55% up from the previous close.
Indiabulls Mutual Fund new issue closes on 5th January
Indiabulls Mutual Fund has launched Indiabulls Ultra Short Term Fund, an open-ended income scheme.
The investment objective of the scheme is to provide liquidity with returns commensurate with low risk through a portfolio of money market and debt securities. The tenure of the scheme is XX days.
The new issue closes on 5th January. The minimum investment amount is Rs5,000.
CRISIL Liquid Fund Index is the benchmark index. Raju Sharma and Puneet Srivastava are the fund managers.