Gujarat-based city gas distribution firm Sabarmati Gas (SGL) is selling a nearly a 50% stake to a consortium of investors, reports Economic Times. Sources close to the deal have confirmed this development to VCCircle. The stake is being sold to IFCI Venture Capital Fund, UTI India Infrastructure Development Seed Asset Ltd and IDFC Project Equity, with each investor picking up a 16.62% stake. The total deal size is expected to be at Rs 80 crore, the report added.
SGL is jointly promoted by Bharat Petroleum Corp (BPCL) and Gujarat State Petroleum Corp (GSPC), and both these companies will continue to hold 25% stake each after the deal. The company was formed in 2006 with an authorised capital of Rs 100 crore for implementing the city
gas (CNG) distribution project targeting the household and automobile sectors in Gandhinagar, Mehsana and Sabarkantha districts.
SGL also supplies gas to industrial units in Santej, Karoli, Khatraj, Vadsar and Bhat areas of Gandhinagar district. These units are involved in manufacturing of ceramics, paper, polyplast bags and aluminium conductors.
SGL had last year said that it's looking to raise Rs 140 crore in equity and had apointed SBI Capital Markets as the adviser. SGL has reported a turnover of Rs 96.80 crore for the financial year ended March 31, 2008 and had a profit after tax of Rs 4.73 crore. The exit for investors may come through an IPO within three years, where they may offload part of their equity.
Power sector continues to attract investments from private equity funds. There has been a recent deal in the power distribution space, where IDFC Private Equity invested Rs 200 crore in Deepak Cables, which is involved in power transmission & distribution (T&D) business.