Anxiety over GSPL gas retail plan for Amritsar

Vol 19, PW 3 (08 Oct 15) Midstream & Downstream
     

Everybody knows Gujarat State Petronet is a gas transmission pipeline company.

But in recent months the BSE-listed GSPC subsidiary has been making bold moves into gas retailing. Anxious shareholders aren't happy and vented their anger at company chairman MM Srivastava during the company’s 17th Annual General Meeting (AGM) in Gandhinagar on September 24.

Most anxiety centres on the company’s “unexpected” decision to set up a gas retail business in the holy city of Amritsar, with its large hard-drinking meat-eating Sikh population, a very different scene from vegetarian teetotal Gujarat. One shareholder was so concerned he stood up and asked 11 questions on why Gujarat Petronet is moving into a new sector (CGD) and whether it makes commercial sense? “Amritsar is a great opportunity to enter a new business (CGD),” Srivastava told assembled shareholders.

“We’ve taken this initiative to enter gas retailing and there is a strategy behind choosing Amritsar.” Exactly what this strategy is remains a mystery.

Instead of spelling it out Srivastava offered a vague assurance that it would be "viable and beneficial" in the years to come. Little wonder his comments did nothing to boost the company's share price: down from Rs125.20 ($1.90) on April 1 to Rs116.90 ($1.77) on October 1.

Gujarat Petronet won permission to set up a gas network over a 2648-sq km area of Amritsar on May 5 this year.