Mahanagar Gas could feel overhang of Shell India’s stake sale
Shares of Mumbai’s city gas distributor, Mahanagar Gas Ltd (MGL), have declined 4.5% this week. Shell India may finally exit the city gas distribution business by selling its 10% stake in the company, said a Mint report on Monday. Shell holds its stake in MGL through its wholly owned subsidiary BG Asia Pacific Holdings Pte. Ltd.
What does this mean for MGL?
On a fundamental basis, the impact of this development is expected to be limited. “The stake sale could, however, have a technical overhang on the stock as we had seen during the earlier two tranches of stake sale in April/August, 2018, (stock down 4-7% each),” said analysts from Jefferies India Pvt. Ltd in a report on 5 March.
