Investors of the country’s largest gas utility GAIL (India) Ltd are an unhappy lot. True, its shares have gained by 8.2% in the past three days from its 52-week trading low on NSE. Still, investors are sitting with a whopping 38.6% drop in share price so far in FY20.
One positive aspect of the steep correction is that the downside may be limited. Still, lack of clarity on the impact of the telecom adjusted gross revenue (AGR) liability issue is a concern that looms large for the company’s investors. Dues sought from GAIL are more than three times its current market capitalization. “Near-term clarity on AGR liability, which is untenable in GAIL’s opinion, will be crucial for the stock,” point outs a report by Kotak Institutional Equities on 2 March.
