CRISIL Ratings has reaffirmed the ‘CRISIL AAA/Stable’ rating on the long-term bank facilities of Gujarat Gas Limited (GGL). This affirmation follows the ongoing amalgamation of GSPC, GSPL, and GEL into GGL. The rating reflects GGL’s position as India’s largest CGD player, strong financial profile, and expected synergy benefits. While near-term volumes have dipped, the merged entity is expected to leverage scale in gas trading, maintaining a debt-free status.
CRISIL Reaffirms Top Rating Post-Merger
CRISIL Ratings has reaffirmed the ‘CRISIL AAA/Stable’ rating on the long-term bank facilities totaling Rs.3350 Crore for Gujarat Gas Limited (GGL). This rating is based on the business risk profile of the merged entity, which combines GGL with Gujarat State Petroleum Corporation (GSPC), Gujarat State Petronet Ltd (GSPL), and GSPC Energy Ltd (GEL). The combined entity is positioned as the largest CGD player in India, supported by a strong financial profile.
Merger Progress and Operational Snapshot
The amalgamation process is noted to be near completion, awaiting the final order from the Hon’ble MCA following a hearing on February 18, 2026. The subsequent demerger and listing of the transmission business as Gujarat Transmission Ltd (GTL) is anticipated within the next 6-7 months. Operationally, CGD volumes dipped in the first nine months of fiscal 2026 to 8.63 mmscmd (down from 9.73 mmscmd in the previous fiscal), primarily due to reduced demand in Morbi clusters.
For GSPC’s trading business, volumes declined to approximately 7 mmscmd in the 9-month period of fiscal 2026, impacting revenue, though the margin remained healthy at ~Rs 940 crore. GGL’s Ebitda per scm sustained at ~Rs 5.4 in fiscal 2025, improving slightly to Rs 5.95/scm for the 9 months of fiscal 2026, driven by a higher share of CNG sales.
Financial Strength and Risk Factors
Both GGL and GSPC are currently debt-free and are expected to maintain this status post-merger, as capital expenditure is funded internally. Liquidity is robust, supported by healthy cash and bank balances exceeding Rs 1,500 crore as of March 31, 2025. The management forecasts annual cash accrual excess of Rs 1,000-1,100 crore, sufficient to cover projected annual capex of Rs 800-1,000 crore.
Key weaknesses include exposure to volatility in R-LNG and domestic natural gas prices, and project risk associated with setting up new CGD networks in recently awarded geographical areas. While GGL maintains a ~25% market share, the ability to pass on price hikes for costlier non-APM gas to price-sensitive consumers remains monitorable.
Key Financial Indicators (Summary)
Financial performance highlights:
- Revenue in 2025 was Rs 16,503 crore, up from Rs 15,597 crore in 2024.
- Profit after Tax (PAT) was stable at approximately Rs 1,146 crore in 2025.
- PAT margin stood at 6.96% in 2025, slightly lower than 7.28% in 2024.
Outlook and Facilities Details
The Outlook is Stable, reflecting the expectation that the merged entity will retain its market leadership and benefit from volume growth and stable realization levels. The rated instruments include Non-Fund Based Limits of Rs 3350.0 crore.
Source: BSE
