BPCL shares rise 2% as board approves MNGL IPO worth Rs 1,000 crore

Shares of Bharat Petroleum Corporation Limited (BPCL) gained momentum on Tuesday, climbing two per cent to touch an intra-day high of Rs 290.50. The uptick followed the company’s announcement of in-principle approval for Maharashtra Natural Gas Limited’s (MNGL) initial public offering (IPO) worth Rs 1,000 crore.

BPCL’s key move fuels investor optimism

BPCL, a Maharatna PSU, revealed its plans for MNGL's IPO via an exchange filing. The company clarified that the IPO is subject to regulatory and other requisite approvals. The move is seen as a step toward unlocking value from its joint venture.

MNGL, a Pune-based city gas distribution company, is a joint venture between BPCL, GAIL, and IGL, with additional equity participation from the Maharashtra government via MIDC.

MNGL’s robust financials attract attention

In FY24, MNGL reported a total revenue of Rs 3,001.88 crore, marking its strong market presence. Its EBITDA surged 41 per cent year-on-year to Rs 961.53 crore, thanks to enhanced gas sourcing strategies and operational efficiencies. The company also achieved a net profit growth of 45 percent, reaching Rs 610.12 crore, translating to a PAT margin of 20 per cent.

Stock performance and outlook

The rise in BPCL’s stock price on Tuesday reflects investor optimism about the proposed IPO. Despite being 23 per cent down from its 52-week high of Rs 376, the stock has shown resilience, recovering by 29 per cent from its 52-week low of Rs 222.55.

What’s next for BPCL and MNGL?

The IPO approval is expected to boost BPCL’s valuation further and expand MNGL’s growth trajectory. Analysts believe this development could drive interest in BPCL shares, supported by MNGL’s robust fundamentals and the government’s thrust on city gas distribution.

With the IPO potentially unlocking shareholder value, BPCL’s strategic roadmap appears well-aligned with investor expectations.