Mahanagar Gas Limited IPO Message Board (Page 54)

Price bands and dates announced. Thank God. looks at attractive !! Wishing everyone best.

Quess corp IPO on 29th Buying Resumed at 600 per application

ARE YOU CONFIRM ?

Dipip dawda not coming in MGL graund

Dipip dawda not coming in MGL graund

Mahanagar Gas Analyst Meet Key Takeaways:

1) Volume growth targeted on historical lines i.e 7-8%. FY16 was weak due to adverse gas to oil economics affecting both CNG and PNG demand.

2) In CNG, almost all public transport in Mumbai like buses, autos and taxis converted. No policy drivers here but on pure economics.

3) MGL wants to increase share of COCO outlets. Penetration is still low at 25-30%. Against a realistic vehicle base of 1.8mn vehicles currently only 0.47mn are on CNG in Mumbai area.

3) In domestic PNG, current connections are to 0.85mn households while target is for 3mn. In last few years 170-180k connections added annually, target now is to double the same.

4) Domestic PNG price is 5% lower to subsidised LPG and 40% to non subsidised. Commercial PNG is 10% cheaper to commercial LPG currently.

5) In CNG, green corridors are avenues for growth. MGL is pursuing the same in peripheral highways to Goa, Pune, Nasik etc.

6) In GA1, core Mumbai some residual demand is there which is met by LMC capex. In GA2 adjoining areas residual demand is higher as it started from CY04. Marketing exclusivity is over while network exclusivity will end in CY20/30 but likely to get 10years extension as per regulations.

7) Raigad capex to start from FY17, ~Rs.500mn annually for next 5years. Long term 5-10yrs potential strong with new airport, smart city and fast industrial and residential growth. In near term 6-7 industrial areas identified which have trunk gas pipeline access and can be supplied through a quick laying of CGD network. FY17 end to see start of operations.

8) Network laying/project execution is challenging in Mumbai area due to numerous statutory approvals required, weather window (monsoons) and local issues. CWIP is high because of that.

9) Do not have any long term LNG contract. Short/medium term contract is there where take or pay portion is 5-6% of total volumes.

10) FY12 had exceptional income of Rs.400mn due to reversal of GAIL''s pipeline tariff by PNGRB which was lowered and booked retrospectively. FY13 was a good year while FY14-16 saw some slowdown due to adverse CGD fuel economics.

11) Capex going forward will be Rs.2bn normal and Rs.0.5bn on Raigad annually. OCF likely to be in the Rs.4bn range. Looking to increase penertration within existing areas and expand in contiguous areas. Focus is to retain and acquire customers. To provide value.

12) Pricing will be dependent on alternate fuels and to maximise customer value add. Opex is on compressors, network etc. Commissions to OMCs, dealers etc are in the revenue head at Rs.2.5-3/kg for CNG.

13) The objective of the IPO is that the company was mandated to divest promoter holding by 20%. MGL''s parentage is strong with GAIL and BG/Shell being resourceful companies. Looking at new cities/GAs under PNGRB bidding and aims to win at least one area.

Dear Eagleye... mare pas 25 Account Hai MGL ki App. gray market kitne tak sale krani chaiye
Please reply.....

Kostak bhav currently is around 1250 (+/- 50)

ONE THING SHOULD BE NOTED HERE THAT THERE IS A VERY HEAVY D I S C O U N T OF RS.38 FOR ELIGIBLE EMPLOYEES CATEGORY.IT MEANS THAT EMPLOYEE QUOTA WILL BE HEAVILY OVERSUBSCRIBED ON FIRST DAY ITSELF ON 21ST. EMPLOYEE RESERVATION IS OF APP.200000 EQUITY SHARES.

Vinod Sir,

Employee Quota is so small in any IPO ... that it is irrelevant for the public at large

EAGLEYE MAM, YOU ARE ABSOLUTELY RIGHT, BUT I MEAN TO SAY THAT IT WILL BE HEAVILY SUBSCRIBED DUE TO THIS D I S C O U N T.

IPO Update- Mahanagar Gas,14 June, 2016

Sector – Oil & gas

Mahanagar Gas Limited (MGL) is a city gas distribution company. MGL supplies natural gas in Mumbai and its surrounding areas. Company is sole authorized distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai. Company supplies CNG though its network of 188 CNG filling stations which includes stations owned and operated by the company, oil marketing companies and private parties. CNG and PNG businesses accounted for 74.2% and 25.8%, respectively, of total gas sales revenue in FY15-16.

Company distribute natural gas through an extensive CGD network of pipelines, for which Mahanagar Gas have the exclusive authorization to lay, build, expand and operate the city gas distribution network. Company have a supply network of over 4,646 kms of pipelines.

Presently MGL supplies PNG to 0.86mn households and CNG to more than 0.47mn vehicles. MGL supplied a total volume of 2.43 mmscmd that includes 1.8 mmscmd of CNG and 0.63 mmscmd of PNG in FY15-16. MGL has gas distribution rights in Mumbai till 2020. Adjoining areas till 2030 and in Raigad district till 2040.

The promoters of the company are:
1. GAIL (India) Limited; (45% holding)
2. BG Asia Pacific Holdings Pte. Limited (45% holding)

Object of the Issue:
The object of the Offer are:
1. to achieve the benefits of listing the Equity Shares on the Stock Exchanges and
2. to carry out the Offer for Sale
Note: Company will not receive any proceeds from the Offer and all proceeds from the Offer shall go to the Selling Shareholders

Sourcing of Gas:
MGL sources 80% APM gas at $3.06/mmbtu and 20% through PMT at $5.6/mmbtu for CNG and Domestic users while PNG(industrial users) is sourced through term RLNG and spot RLNG.

Capex:
MGL is expected to do the capex of INR 2.3-2.4bn going forward as compared to INR 2.2bn in FY15-16 and INR 2.0bn in FY14-15. MGL is expected to add 83 CNG filling stations and 675 km of pipeline in next 5 years.

Financials:
Revenue- INR 2078 cr in 2015-16 as compared to INR 2095 cr in 2014-15 and INR 1885 cr in 2013-14
PAT- INR 308 cr in 2015-16 as compared to INR 301 cr in 2014-15 and INR 297 cr in 2013-14
EPS- INR 31.36 in 2015-16 as compared to INR 30.54 in 2014-15 and INR 30.15 in 2013-14
Gas supplied- 2.43 mmscmd in 2015-16 as compared to 2.38 mmscmd in 2014-15 and 2.26 mmscmd in 2013-14
Dividend pay-out policy of 35% depending on capex requirement of the company
Shareholders’ equity: INR 1527 cr
Total borrowings: INR 4.37 cr
Cash & cash equivalents: INR 561 cr
ROCE: 18.81
ROE: 20.19

Why to Invest in MGL:
Mumbai has a population of 20.7mn with 5mn households and 6.7mn motor vehicles. MGL serves only 0.47mn vehicle and 0.86mn domestic users. MGL wants to tap this potential and plans to connect 3mn households in future.

Valuations:
MGL reported an EPS of INR 31.4 in FY15-16 and is expected to do an EPS of INR 33.5 in FY16-17 and INR 35 in FY17-18. Its closest competitor IGL is trading at 17x FY17-18 EPS. If we give a multiple of 15x over FY17-18 EPS to arrive at an expected target price of INR 525/share. IGL has 390 CNG pumps as compared to 188 for MGL. IGL has 2292 commercial industrial users as compared to 2800 for MGL. IGL has 0.56mn domestic users as compared to 0.86mn for MGL. IGL has daily volumes of 3.8 mmscmd as compared to 2.43 mmscmd for MGL.

Issue Detail:
Issue Open: June 21, 2016 – June 23, 2016
Issue Type: Book Built Issue IPO
Issue Size: 24,694,500 Equity Shares of Rs 10 aggregating up to Rs [1200] Cr
Offer for Sale of 24,694,500 Equity Shares of Rs 10 aggregating up to Rs [1200] Cr
Face Value: Rs 10 Per Equity Share
Price Band: INR 380 to INR 421
Bids: 35 shares and multiples of 35
Listing At: BSE, NSE

Mahanagar Gas IPO
GMP 125-128 (very actively traded)

Mumbai-based city gas distribution (CGD) company Mahanagar Gas (MGL) has a similar business model to that of listed peer Indraprastha Gas (IGL). Both enjoy near-monopoly status in their respective areas of operation.

MGL operates in Mumbai and adjoining Thane and Raigad. It is the third largest in CGD. Second largest is IGL, covering Delhi and other places in the National Capital Region.

Both derive higher revenues (74-77 per cent) from a retail-focused compressed natural gas (CNG) business. Their relatively lower exposure to the low-margin and cyclical industrial piped natural gas (PNG) segment - 15 per cent for MGL and 18 per cent for IGL -- is a key positive. Notably, CNG is an environment-friendly automobile fuel over petrol and diesel. With the government''s thrust on CNG and domestic PNG increasing, these companies are well poised to benefit.

High entry barriers in the CGD business in the form of huge capital expenditure needs, time taken to set up a pipeline network (including last-mile connectivity) and access to gas supplies, debt-free balance sheets, a healthy cash kitty and strong return ratios are key strengths of both. Most analysts are, thus, positive on the listed company, IGL.

India''s leading CGD player, - Gujarat Gas, is however a play on the industrial gas segment, three-fourths of its revenue. In this backdrop and given the price band, MGL''s offer for sale of equity appears fairly valued.

The MGL Initial Public Offer of equity is entirely an offer for sale (GAIL and Shell are selling a part of their 45 per cent holding), which means the IPO money will not flow into the company. At the price band of Rs 380-421 and assuming a 10 per cent growth in net profit in FY17, the issue is priced between 11 and 12 times the FY17 estimated earnings. MGL is thus priced at a discount to larger peer IGL, which trades at 15 times the FY17 estimated earnings.

On the business front, apart from a benefiting regulatory environment, the fundamentals are also turning favourable. With crude oil prices firming up again, CNG''s cost-effectiveness versus competing fuels such as petrol and diesel has improved further. This gives a fillip to the process of vehicle conversion from the traditional automobile fuels. While a significant fall in crude oil prices could lead to some pressure on these companies'' volumes in both the CNG and industrial segments, the long-term prospects remain healthy, given the preference for cleaner fuels.

An important risk for these companies, however, is a potential loss in the case regarding end of marketing exclusivity. Both await the Delhi high court''s verdict on the issue. An unfavourable ruling would mean they have to distribute other competing companies'' gas through their own pipeline network, for a pre-determined rate. They could then lose customers and margins to new competitors, while emerging as common carriers or contract carriers earning income from gas transmission and distribution services.

Rajeev Mathur, managing director, MGL, in a media meet, said: "Our marketing exclusivity ended some time back but we have not witnessed increased competition from other players yet. We are hopeful of receiving a favourable verdict in the case."

As an effort to reduce the impact of any such adverse ruling, both have started bidding for CGD contracts in other cities and have also become more aggressive on acquiring smaller CGD entities. While these moves will enable them to diversify their revenues geographically, it is a gradual process and will take some time to contribute meaningfully to their financials.

In fact, 11 new cities in Maharashtra and 60 in the rest of India are coming for bidding. This reflects the growth potential for CGD companies. MGL is also ramping up its reach in Thane and Raigad.

Both MGL and IGL source their key input, natural gas, from the ministry of petroleum and natural gas (MoPNG) under the administered price mechanism, wherein gas prices are low. Any change in government policy on this front is a potential risk, as they might have to source gas at a higher price. While falling global LNG prices is a positive, both source about 85 per cent of their requirements from the domestic market and buy imported LNG only for the industrial business.

Unlike IGL, a large part of CNG sold by MGL is on the network of oil marketing companies. MGL currently pays Rs 2.74 per kg to the latter for using their CNG filling stations. In case its exclusivity period ends, MGL could face competition and might have to make higher payments to these companies.

Overall, as things stand, the prospects of both appear good. While the end of exclusivity remains a key monitorable, their plans to venture and scale up operations in other cities will offset some pressure.

Sir,wold you please share your view on Heritage foods for long term?????? Reply expected

I have kept very low growth rate in my assumption and 25% MOS still make with a decent fair value Rs765 compare to issue price of 421 so good upside in long run High entry barriers in the CGD business in the form of huge capital expenditure needs, time taken to set up a pipeline network (including last-mile connectivity) and access to gas supplies, debt-free balance sheets, a healthy cash kitty and strong return ratios are key strengths of both. And compare to listed peers it is at a good 30% discount so good upside IMO. do put single lot application only in multiple PAN account best of luck apply and also like equitas and ujjivian buy from the market on listing
Initial Cash Flow:      $3,01,00,00,000                   
                        
Years:      1-5      6-10            
Growth Rate:      15%      12%            
                        
Terminal Growth Rate:      5%            Discount Rate:      10%
                        
Shares Outstanding:      9,87,77,778             Margin of Safety:      25%
Debt Level:                        
                        
Year      Flows      Growth      Value      
1      3,37,12,00,000       12%      $3,06,47,27,273       
2      3,74,20,32,000       11%      $3,09,25,88,430       
3      4,11,62,35,200       10%      $3,09,25,88,430       
4      4,48,66,96,368       9%      $3,06,44,73,989       
5      4,93,53,66,005       10%      $3,06,44,73,989       
6      5,47,82,56,265       11%      $3,09,23,32,844       
7      6,13,56,47,017       12%      $3,14,85,57,077       
8      6,93,32,81,129       13%      $3,23,44,26,816       
9      7,76,52,74,865       12%      $3,29,32,34,576       
10      8,61,94,55,100       11%      $3,32,31,73,072       
                        
                        
Terminal Year      $9,05,04,27,855                   
                        
PV of Year 1-10 Cash Flows:                  $31,47,05,76,497       
                        
Terminal Value:                  $69,78,66,34,520       
                        
Total PV of Cash Flows:                  $1,01,25,72,11,017       
                        
Number of Shares:                  9,87,77,778       
                        
Intrinsic Value (IV):                  $1,025.10       
                        
Margin of Safety IV:                  $768.83       
                        
What Percentage of IV comes from                   69%      
the Terminal Value:                        

Eagleeye ji,plz post ur view abt QH.SEPTA JI WHAT ABT PCL?

ARUP i have said many time i am in for long run it is good company market leader once it show few good quarertly result it will give handsome return

Monetary aggregates, known also as "money supply", is the quantity of currency available within the economy to purchase goods and services. M3 is a broad monetary aggregate that includes all physical currency circulating in the economy (banknotes and coins), operational deposits in central bank, money in current accounts, saving accounts, money market deposits, certificates of deposit, all other deposits and repurchase agreements.

this is going to be declared on last day of MGL ipo at 5 PM and it is in downtrend it will surely effect listing although it is good ipo for long term

moderator please update issue details.

The price band for the IPO is Rs 380 per share to Rs 420 per share

Message to moderator: Can you please display the financial performance of company YoY in the main section.

GMP of mgl

It will list around 575.

What about mgl listing price to market expectation ?

kohi to batao sir....me 20 application karnra chati hu isliey.....pls sir tell me.

Accha nhi hai bilkul apply mat karna....profit flat hai company ka...govt control hai...loss ho jaega tumko...b careful

KAL BATATA HOON OK!!!!!!!!!!!!!!!!!

mahanagar gas ipo kitne me open hoga ......kya 600 rs hoga ?????????????????????

ye kya bachpana laga rakha heee....