GAIL Plans Stock Exchange Listing for City Gas Distribution Arm - Strategic Move to Unlock Value

Gas giant GAIL makes power play—prepping its city gas distribution unit for public markets.

Fueling Growth Through Capital Markets

The state-owned energy behemoth isn't just sitting on pipelines—it's building value. Spinning off the distribution arm could attract fresh capital, drive expansion, and maybe even make some institutional investors finally notice the energy sector beyond oil.

Because nothing says 'liquidity event' like taking a regulated utility public—just what every portfolio needs between crypto rallies and AI hype cycles.

Rationale

GGL’s presence has expanded to 25 Geographical Areas (GAs) across 49 districts in 13 states on a standalone basis and through 6 Joint Ventures.

It is in various stages of implementing CGD projects in 16 GAs across eight states, on a standalone basis, the tender document said.

Besides, its scale of supply and delivery of compressed natural gas (CNG) for industries and mobility, as well as domestic PNG (D-PNG) for households, will expand as it plans to add more GAs to its portfolio.

For instance, GGL is also contemplating the acquisition of GAIL’s 6 GAs spread across four states, and is in the process of acquiring Gwalior and Sheopur Districts (Madhya Pradesh) from one of its joint ventures, subject to approval.

Apart from this, it is pursuing the city gas business in East and West Godavari (Andhra Pradesh), Kota (Rajasthan), Vadodara (Gujarat), Haridwar (Uttarakhand), North Goa (Goa), Kamrup and Kamrup Metropolitan Districts, and Cachar, Hailakandi & Karimganj (Assam) through joint ventures.

Growth prospects

GAIL expects GGL’s business to expand based on its expansion plans and past operational metrics.

For instance, GGL achieved its highest-ever Gross Turnover of Rs 10,944 crore and its highest-ever Profit After Tax (PAT) of Rs 323 crore in FY24, its annual report said.

This was aided by higher CNG sales, which grew 32 per cent Y-o-Y to 267 million standard cubic meters (MSCM) in FY24.

The annual report also highlighted GGL’s comprehensive growth strategy resting on five pillars—increasing current Gas Sales and expanding the GA Portfolio; increasing the share of wallet of current customers; growing the Core through M&As; strong expansion into adjacent segments and serving the rest of the market.

The efforts by India’s largest gas utility to list its CGD arm comes at a time when the country’s natural gas demand is appreciating aided by an expanding industrial and commercial base as well as rising piped natural gas (PNG) usage as more households get connected to the gas grid.

For instance, the Petroleum and Natural Gas Regulatory Board (PNGRB) expects CGD to account for almost one-third of India’s cumulative consumption by 2030. Similarly, CareEdge Ratings expects CGD volumes to grow at a CAGR of 10 per cent during the same period.

India also aims to increase the share of natural gas in its primary energy mix from around 6 per cent to 15 per cent by 2030.

Published on September 10, 2025