MGL shares scale 52-week peak with huge volumes — what's keeping the Street excited

MGL share price: Mahanagar Gas Limited (MGL) shares scaled a fresh 52-week high on Monday, trading with huge volumes after the company announced the acquisition of a 100 per cent stake in Ashoka Buildcon's city gas arm, Unison Enviro. The MGL stock jumped as much as 8.5 per cent to Rs 983.6 apiece on BSE — surpassing the existing 52-week high of February 16 this year.

After market hours on Friday, Mahanagar Gas said it had signed an agreement to acquire private sector city gas distributor Unison Enviro from Ashoka Buildcon and a Morgan Stanley India Infrastructure-managed investment fund.

Unison Enviro, a subsidiary of highways developer Ashoka Buildcon, is a city gas distributor operating in the districts of Ratnagiri, Latur and Osmanabad in Maharashtra, and Chitradurga and Davanagere in Karnataka, catering to domestic, commercial, industrial and transport sectors, according to a company statement.

Currently, it has licence to sell natural gas only in Mumbai metropolitan region and in the neighbouring Raigad district.

Also Read: ICICI Securities recommends HOLD on Mahanagar Gas, IGL, Gujarat Gas shares

What brokerages recommend on MGL

Amid MGL's foray into inorganic growth, brokerage Citi maintained a ‘buy’ rating on the company with a target of Rs 1,030 per share — implying an upside of 14 per cent.

Jefferies and Nomura are skeptical on MGL parent GAIL India. Jefferies maintained a ‘hold’ rating and Nomura continued with a ‘neutral’ call on MGL with target prices of Rs 90 and Rs 100 respectively.

MGL share price

Mahanagar Gas shares have jumped more than 35 per cent in the last one year, a period in which the Sensex headline index has risen 14 per cent.

(With inputs from PTI)

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