Mahanagar Gas rises nearly 24%, closes at Rs 520.30 on Day 1

Mahanagar Gas shares rallied 23.6 percent to close at Rs 520.30 on the National Stock Exchange on Friday, driven by value buying and positive market sentiment. Analysts feel the valuations of the stock are cheap compared to listed peers like Indraprastha Gas, which was the reason for huge buying in the stock. Prayesh Jain, Analyst, IIFL feels the company could see a volume growth of 5-6 percent and topline growth of around 6-8 percent in a couple of years. The stock has opened at Rs 540 against issue price of Rs 421 and touched an intraday high of Rs 548.95 & low of Rs 518. The country's second largest CNG retailer had raised Rs 1,040 crore through its IPO that opened for subscription between June 21-23. It was an offer for sale issue that means the entire money was received by promoters. Mahanagar Gas is promoted by state-run GAIL and British Gas Asia Pacific Holdings. The company has exclusive gas distribution rights in Mumbai till 2020, adjoining areas of Thane & Navi Mumbai till 2030 and Raigad district till 2040. MGL's sales volume and revenue grew at the CAGR of 5.7 percent and 12.3 percent, respectively over FY12-FY16. It has a city gas infrastructure network of 188 compressed natural gas (CNG) filling stations with a compression capacity of 3.1 million kg/day in FY16, providing CNG to over 0.47 million vehicles. The company supplied piped natural gas (PNG) to 9 lakh domestic customers, 2866 commercial and 60 industrial customers in FY16, through an integrated pipeline network of over 4686 km that includes 415 km of steel and 4231 of polyethylene pipeline.