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Tuesday, November 24, 2009

GAIL India to fund Rs 500 cr to its subsidiary

GAIL Gas today said its parent company GAIL India would give Rs 500 crore for funding its four ongoing city gas projects in the country.

"The company came into existence with a seed capital of Rs 200 crore from GAIL India. We would get around Rs 500 crore over the next five year for our four ongoing city gas projects in Meerut, Dewas, Sonipat and Kota," GAIL Gas Chief Executive Officer M Ravindran told reporters on the sidelines of a conference here.

He said: "Our debt requirement for these four projects would be close to Rs 180 crore. Since our parent company has cash surplus, we are not exploring the option of infusion of fresh equity for raising the money from the market."

When asked that if it is a cash surplus company then why GAIL India raising money from the market, he replied, "Our parent company has been raising money for trunk pipelines projects which are obviously very capital intensive. This is not the case with city gas projects which require Rs 150-200 crore depending on the size and population of a city."

About the progress of the four city gas projects, Ravindran said, "These four city gas projects are already on. We hope to start some supplies in the four cities during January to March next year."

The four city gas projects in Meerut, Dewas, Sonipat and Kota were awarded to the company in June last year.

Out of 220 city, where city gas projects would come up by 2020, the company is eyeing around 60 per cent of those (132 cities). The company is aiming at bagging 75 city gas projects by 2011 through competitive bidding process, Ravindran said

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