The downstream regulator has approved French energy giant Total’s deal to buy stake in Adani Gas, lifting its shares 13% as investors cheered the end of uncertainty over the company’s city gas licences since November, when the same authority questioned the transaction and issued a show-cause notice.
The Petroleum and Natural Gas Regulatory Board (PNGRB) had objected to restructuring of Adani Gas and the agreed sale of stake in it to Total because there are restrictions on such deals in the first five years after a licence is granted.
However, after hearing the Gautam Adani-led company’s plea and keeping in mind “the larger public interest”, it “condoned” the delay in seeking its clearance and approved both transactions on Wednesday. PNGRB cited the importance of supplying natural gas to various cities where Adani Gas has a licence, and the value of having a reputed foreign company participate in city gas ventures in India.
Adani Gas is one of India’s biggest city gas licence holders, with permits to operate in 19 areas on its own and another 19 jointly with Indian Oil.
On October 14, it announced Total’s plan to buy 37.4% stake in Adani Gas through a mix of open offer and purchase from promoters but it sought regulatory approval only on December 23.