To raise Rs 500 cr via bonds in January.

Our Bureau

New Delhi, Aug. 2

GAIL (India) Ltd has reported a 35 per cent increase in its net profit for the first quarter of the current fiscal, as it transported more natural gas and LPG as well as made more revenues from marketing margins.

The company's net profit for the quarter stood at Rs 887 crore against Rs 656 crore in the corresponding previous quarter. GAIL has registered an increase of 18 per cent in turnover at Rs 7,096 crore (Rs 6,039 crore).

This is despite the heavy subsidy burden which GAIL had to share along with ONGC and Oil India to partially compensate the public sector oil retailers. GAIL has shared Rs 445 crore towards domestic LPG and PDS Kerosene subsidy in the first quarter (Rs 75 crore).

Net Sales

Addressing newspersons after the board meeting, GAIL Chairman and Managing Director, Mr B.C. Tripathi, said: “The net sales from natural gas trading during the first quarter increased by 17 per cent to Rs 5,452 crore and revenue from natural gas transmission business rose by 22 per cent to Rs 897 crore.”

“During the quarter GAIL's revenue from LPG transmission increased by 8 per cent to Rs 114 crore and the net sales from LPG and liquid hydrocarbons business increased by 14 per cent to Rs 781 crore,” he said.

About GAIL's fund raising plans to meet its capital expenditure requirements of close to Rs 40,000 crore in the next three years, Mr Tripathi said, “We are going to raise $150 million via external commercial borrowings (ECB) by the end of this fiscal.” The company has got the Board's nod to raise a total of $500 million through ECB in tranches.

Besides, for the first time the company plans to tap the bond market. GAIL is planning to raise Rs 500 crore via bonds in January with a green shoe option of 50 per cent having a tenor of 7-10 years.

The board has also approved raising Rs 1,250 crore loan from HDFC Bank, he said. GAIL plans to double capacity of its petrochemical plant at Pata from 5,00,000 tonne per annum for Rs 8,200 crore in next 36 months.

Of the total capex, GAIL plans to invest 60 per cent in pipeline business, 20 per cent in petrochemicals, 13 per cent in joint venture business, and 7 per cent exploration and production capacity.

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(This article was published in the Business Line print edition dated August 3, 2010)
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