Bharat Petroleum Corporation Limited (BPCL) closed at Rs 290.50 on the day. The hike followed the company’s announcement of in-principle approval for Maharashtra Natural Gas Limited’s (MNGL) initial public offering (IPO) worth Rs 1,000 crore.
BPCL’s landmark move fuels investors’ optimism
BPCL, a Maharatna PSU, has revealed its plans for an IPO of MNGL in an exchange filing. The company clarified that the IPO is subject to regulatory and other necessary approvals. This step is considered a step towards unlocking value from your joint venture.
MNGL, a city gas distribution company based in Pune, is a joint venture between BPCL, GAIL, and IGL, with additional equity participation from the Maharashtra government through MIDC.
MNGL’s strong financials attract attention
In FY24, MNGL reported a total revenue of Rs 3,001.88 crore, marking its strong market presence. Its EBITDA increased by 41 percent year-on-year to Rs 961.53 crore, thanks to improved gas sourcing strategies and operational efficiencies. The company also achieved a net profit growth of 45 percent, to Rs 610.12 crore, which translates to a PAT margin of 20 percent.
Stock performance and outlook
The rise in BPCL stock price on Tuesday reflects investors’ optimism about the proposed IPO. Despite being 23 percent down from its 52-week high of Rs 376, the stock showed resilience, recovering 29 percent from its 52-week low of Rs 222.55.
What next for BPCL and MNGL?
The IPO approval is expected to boost BPCL’s valuation and increase MNGL’s growth trajectory. Analysts believe that this development is likely to drive interest in BPCL shares, supported by MNGL’s strong fundamentals and the government’s focus on city gas distribution.
With the shareholder value that the IPO could unlock, BPCL’s strategic roadmap appears to be well in line with investor expectations.
