Gujarat Gas rallies 14% intraday, ends 6% higher

NEW DELHI: Gujarat Gas Company Ltd rallied as much as 14.04 per cent in trade on Tuesday, after its board approved a proposed merger with other state-run companies involved in city gas distribution business.

The stock ended the day on the BSE at Rs 235.50; up 6.01%.

GSPC Distribution Networks, GSPC Gas, Gujarat Gas Financial Services and Gujarat Gas Trading Co are proposed to be merged with the Gujarat Gas Company, it said in a statement on Monday.

Analysts tracking the sector say the proposed merger with gas distributors would boost the company's valuations in line with rival state-run Indraprastha Gas Ltd.

Gujarat Gas is trading at 8.3 times of its 12-month forward earnings while Indraprastha is trading at 9.5 times, according to Thomson Reuters data.