11th cgd round to keep growth ablaze
TRANSCRIPT
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset Edelweiss Securities Limited
Potential CGD geographical areas: 65
65 new geographical areas in 11th round
11th CGD round to keep growth ablaze
In a much-awaited move, the Petroleum and Natural Gas Regulatory Board (PNGRB) has kick-started the 11th round of city gas distribution (CGD) auction process with bids likely to be invited in December.
Highlights: i) 65 new geographical areas (GAs) have been shortlisted, in addition to 227 new GA licences authorised during the past three
years. All in all, gas coverage would thus extend to 70% of population from less than 20% at present. ii) This shall sustain 10–14% annual volume growth, perhaps into the next decade. Accordingly, we argue stock valuations would expand. iii) Going by past bidding patterns, Adani Gas followed by Gujarat Gas and IGL might emerge as the largest bidders. MGL is unlikely to bid aggressively.
CGD poised to cover 70% of population versus ~20% at present…
The government targets to triple CGD volumes by 2030 as these 11 new licensing
rounds would cover 70% of the population from 20% at present. The speed at which
the 9th and 10th rounds of bidding had concluded demonstrates the government’s
intent to achieve its target of gas making up 15% of India’s energy mix by 2030.
Government had earlier set aggressive targets for CGD directing 15mn households
across India to have access to PNG, almost quadrupling in next four–five years.
Based on 65 new GAs, which will be open for bidding, the PNGRB is increasing its
focus on regions beyond Delhi, Maharashtra and Gujarat (exhibit 5). We expect new
GAs to start contributing materially post-2025 to overall CGD consumption.
…but some bumps along the way
The PNGRB targets to invite bids in December, but we believe it lacks a full suite of
directors on the board, which is stalling progress on the matter. While some GAs
are large – Uttar Pradesh, Bihar, Andhra Pradesh and West Bengal – the list also
includes a long tail. Meanwhile, absence of gas pipeline infrastructure may limit
interest in four GAs. We remain sceptical though on completion of work by some of
the past successful bidders within stipulated time frames given very aggressive PNG
connections and CNG stations targets bid during the past two–three rounds.
Long-term positive: IGL, GGL to leverage expertise, balance sheets
While it is too early to make a call, going by past bidding patterns, Adani Gas
followed by Gujarat Gas and IGL could be the largest bidders. MGL did not show
much interest during past biddings. We believe incumbents IGL and GGL are best
placed to leverage their expertise and strong balance sheets. Accordingly, they will
uniquely pursue high-potential GAs while CNG usage across existing network would
also perk up on enhanced intercity infrastructure.
Overall, we believe a very long and sustainable period of high-growth phase for the
CGD industry shall enable expansion of stock valuations. We have a ‘BUY’ on all
three companies and our pecking order is: i) IGL (TP: INR 703), GGL (TP: INR942) and
MGL (TP: INR 1,480). For more, please refer to our latest CNG moat intact: No
pressure from EVs
227
292
65
0
60
120
180
240
300
GAs awardedso far
Round11
Potential
Nu
mb
er o
f ar
eas
(No
.)
0.0
20.0
40.0
60.0
80.0
100.0
1st
- 2
00
9
2n
d -
20
09
3rd
- 2
01
1
4th
- 2
01
4
5th
- 2
01
5
6th
- 2
01
6
7th
- 2
01
6
8th
- 2
01
6
9th
- 2
01
8
10
th -
20
18
11
th -
20
21
(No
s)
Areas offered Areas awarded
India Equity Research Oil & Gas September 20, 2021
CITY GAS DISTRIBUTION SECTOR UPDATE
Jal Irani Shubham Mittal Iqbal Khan +91 (22) 6620 3087 +91 (22) 4063 5459 [email protected] [email protected] [email protected]
CITY GAS DISTRIBUTION
Edelweiss Securities Limited
2 Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset
Rapid growth in potential CGD geographical areas to 292
Source: Edelweiss Research
Giant leap—65 new geographical areas in 11th round
Source: Edelweiss Research
Revised bidding criteria 9th round onwards (since 2018): Sharper focus on PNG/CNG/pipeline infrastructure
Criteria prior to 2018 (1st-8th rounds) Criteria prior from 2018 (9st-11th rounds)
Requirement Weight (%) Requirement Weight (%)
Lowness of present value of network tariff over 25
years 70 Lowness of Transportation rate for CGD
(INR/MMBTU) 10
Lowness of PV of compression charges for CNG over
25 years 30 Lowness of Transportation rate for CNG (INR/kg) 10
Highness of No. of CNG Stations to be installed
within 8 years from authorization 20
Highness of No. of residential PNG connections to be
achieved within 8 years from authorization 50
Highness of inch-km of pipeline to be laid within 8
years from authorization 10
Source: Edelweiss Research
227
292
65
0
60
120
180
240
300
GAs awardedso far
Round11
Potential
Nu
mb
er o
f ar
eas
(No
.)
0.0
20.0
40.0
60.0
80.0
100.0
1st -2009
2nd -2009
3rd -2011
4th -2014
5th -2015
6th -2016
7th -2016
8th -2016
9th -2018
10th -2018
11th -2021
(No
s.)
Areas offered Areas awarded
Edelweiss Securities Limited
CITY GAS DISTRIBUTION
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset 3
IGL and MGL have cleaner balance sheets; IGL, GGL higher growth
FY21 (INR mn) IGL MGL GGL
Volume growth FY16-20 (%) 12.6 4.9 14.2
Volume growth FY21-25 (%) 16.2 11.9 12.0
PAT 11,726 6,196 12,777
Operating cash flow 15,460 8,055 16,552
Capex 8,829 3,146 7,513
FCFF 6,631 4,909 9,038
Total borrowings - - 7,700
Cash 11,323 15,368 3,210
Net (cash) / borrowings (11,323) (15,368) 4,490
Net debt/equity (x) (0.2) (0.5) 0.1
Source: Edelweiss Research
CITY GAS DISTRIBUTION
Edelweiss Securities Limited
4 Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset
11th round bidding places more emphasis on regions outside Delhi, Maharashtra and Gujarat
Source: Edelweiss Research
S.no Geographical Area State Population
1 Kurnool, Guntur, and Prakasam districts Andhra Pradesh 1,23,38,724
2 Nagaon, Morigaon, Hojai, Karbi Anglong and West Karbi Anglong districts Assam 47,37,504
3 Lakhimpur, Dhemaji , Darrang, Udalgiri, Sonitpur and Biswanath districts Assam 54,12,548
4 Kokrajhar and Dhubri districts Assam 28,36,400
5 Baksa, Barpeta, Bongaigaon, Chirang and Nalbari districts Assam 46,36,302
6 Darbhanga, Madhubani, Supaul, Sitamarhi and Sheohar districts Bihar 1,47,33,660
7 Gopalganj, Siwan, West Champaran, East Champaran and Deoria Bihar & Uttar Pradesh 1,80,27,835
8 Baloda Bazar, Gariyaband and Raipur districts Chhattisgarh 40,63,872
9 Kabirdham, Raj Nandgaon and Kanker districts Chhattisgarh 31,08,600
10 Mungeli, Bemetara, Durg, Balod and Dhamtari districts Chhattisgarh 48,45,360
11 Jashpur, Raigarh, Janjgir-Champa and Mahasamund districts Chhattisgarh 49,98,114
12 Koriya and Surajpur districts Chhattisgarh 14,47,960
13 Balrampur and Surguja districts Chhattisgarh 15,70,843
14 Kondagaon, Bastar and Sukma districts Chhattisgarh 16,63,358
15 Narayanpur, Bijapur and Dantewada Chhattisgarh 6,78,529
16 Mandi, Kullu, Kinnaur and Lahaul & Spiti districts Himachal Pradesh 15,53,365
17 Kangra and Chamba districts Himachal Pradesh 20,29,155
18 Jammu, Udhampur, Reasi, Samba and Kathua districts UT of Jammu and Kashmir 33,34,943
19 Gumla, Latehar, Lohardaga, Simdega, Garhwa and Khunti districts Jharkhand 46,68,228
20 Chikkaballapur district Karnataka 12,55,104
21 Idukki, Kottayam and Pathanamthitta districts Kerala 42,80,937
22 Agar Malwa, Neemuch, Mandsaur and Jhalawar districts Madhya Pradesh & Rajasthan 41,48,885
23 Burhanpur, Khandwa, Khargone and Harda districts Madhya Pradesh 45,11,419
24 Tikamgarh, Niwari, Chattarpur and Panna districts Madhya Pradesh 42,24,061
25 Betul, Chhindwara, Seoni and Balaghat districts Madhya Pradesh 67,47,113
26 Damoh, Jabalpur, Katni, Mandla, Umaria and Dindori districts Madhya Pradesh 74,23,737
27 Hoshangabad, Narsinghpur, Sagar and Vidisha districts Madhya Pradesh 61,70,537
28 Buldana, Nanded and Parbhani districts Maharashtra 77,83,636
29 Beed, Jalgaon and Jalna districts Maharashtra 87,74,012
30 Akola, Hingoli and Washim districts Maharashtra 41,88,411
31 Amravati and Yavatmal districts Maharashtra 56,60,793
32 Chandrapur and Wardha districts Maharashtra 35,05,081
33 Nagpur district Maharashtra 46,53,570
34 Bhandara, Gondiya and Garchiroli districts Maharashtra 35,95,783
35 Alirajpur, Nandurbar and Barwani districts Maharashtra & Madhya Pradesh 37,63,175
36 Koraput, Malkangiri, and Nabarangpur districts Odisha 32,13,785
37 Gajapati, Kandhamal, Boudh and Sonepur districts Odisha 23,62,272
38 Rayagada, Kalahandi, Bolangir and Nuapada districts Odisha 48,04,159
39 Pathankot district Punjab 6,76,598
40 Tarn Taran district Punjab 11,19,627
41 Fazilka (except area already authorized), Ganganagar and Hanumangarh districts Punjab & Rajasthan 47,67,425
42 Bikaner and Churu districts Rajasthan 44,03,484
43 Jhunjhunu, Sikar and Nagaur districts Rajasthan 81,22,121
44 Dausa, Karauli, Sawai Madhopur and Tonk districts Rajasthan 58,49,534
45 Dharmapuri and Krishnagiri districts Tamil Nadu 33,86,652
46 Tiruvannamalai and Villupuram districts Tamil Nadu 59,23,748
47 Ariyalur and Perambalur districts Tamil Nadu 13,20,117
48 Namakkal and Tiruchirapalli districts Tamil Nadu 44,48,891
49 Pudukottai, Sivaganga and Thanjavur districts Tamil Nadu 53,63,336
50 Madurai, Theni and Virudhnagar districts Tamil Nadu 62,26,439
51 Kanyakumari, Thoothukudi and Tiruneveli Kattabo districts Tamil Nadu 66,97,783
52 Dindigul and Karur districts Tamil Nadu 32,24,268
53 The Nilgiris and Erode districts Tamil Nadu 29,87,138
54 Nizamabad, Adilabad, Nirmal, Mancherial and Kumuram Bheem Asifabad districts Telangana 52,92,574
55 Jogulamba Gadwal, Nagarkurnool, Mahabubnagar, Narayanpet, Wanaparthy and Yadgir districtsTelangana & Karnataka 47,85,208
56 South Tripura and Sepahijala district Tripura 9,37,965
57 Dhalai, North Tripura, Unakoti and Khowai Tripura 13,60,183
58 Amroha & Sambhal (except area already authorized) districts Uttar Pradesh 36,30,870
59 Kasganj district Uttar Pradesh 14,36,719
60 Purulia and Bankura districts West Bengal 65,26,789
61 East Mednipore, West Mednipore and Jhargram districts West Bengal 1,10,09,332
62 Alipurduar and Koch Bihar West Bengal 42,45,104
63 Banda, Chitrakoot and Mahoba Uttar Pradesh 36,67,098
64 Pauri Garhwal, Uttarkashi, Rudraprayag and Tehri Garhwal districts Uttarakhand 18,78,573
65 Pithoragarh, Champawat, Almora, Chamoli and Bageshwar districts Uttarakhand 20,17,096
Edelweiss Securities Limited
CITY GAS DISTRIBUTION
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset 5
Areas offered in earlier ten rounds
Source: Edelweiss Research
Round Areas offered Areas bid
Kota a
Sonipat a
Mathura a
Kakinada a
Meerut a
Dewas a
Ghaziabad
Allahabad a
Jhansi a
Rajahmundry
Yanam
Shahdol
Chandigarh a
Asansol-Durgapur
Ludhiana a
Jalandhar a
Panipat
Jamnagar a
Bhavnagar a
Kutch-East a
Kutch-West a
Ernakulam a
Ranga
Nalgonda
Khammam
Bengaluru a
Raigarh a
Pune a
Thane a
UT of Daman a
UT of Dadra and Nagar Haveli a
Shahjahanpur
Guna
Panipat a
Amritsar a
East Godavari a
Belgaum a
Ahmadnagar
Krishna a
Muzaffarnagar
West Godawari a
Badaun
Aligarh
Bulandshahr
Banaskantha
Tumkur a
Latur
Dhar
Dahod
Haridwar a
Dharwad a
Shivpuri
Bidar
Osmanabad
Udham Singh Nagar a
Round 1
Round 2
Round 3
Round 4
Round 5
CITY GAS DISTRIBUTION
Edelweiss Securities Limited
6 Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset
Areas offered in earlier ten rounds (contd.)
Source: Edelweiss Research
Round Areas offered Areas bid
Dhar a
Dahod a
Ahmadnagar
Banaskantha a
Saharanpur a
Raebareli
Mainpuri
Ramabai
Chitradurga
Bhiwani
Ratnagiri a
Amreli a
Bhatinda a
Auraiya
Patan a
Baghpat
Etawah
Yamunanagar a
Shahdol
Gadag
Jhabua
Nainital
Rewari a
North a
Datia
Rupnagar a
Fatehgarh a
Dahej-Vagra a
Amethi
Ahmedabad
Anand a
Panchmahal a
Rewa
Rohtak
Jaipur
Solapur a
Davanagari
Udaipur
Bhopal
Karnal a
Ambala & Kurukshetra a
South Goa a
Yanam
Bulandshahr a
Bagpat a
Kolhapur a
Round 7
Round 8
Round 6
Edelweiss Securities Limited
CITY GAS DISTRIBUTION
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset 7
Areas offered in earlier ten rounds (contd.)
Source: Edelweiss Research
Round Areas offered Areas bid
Srikakulam, Visakhapatnam & Vizianagaram a
Cachar, Hailakandi & Karimganj a
Kamrup & Kamrup Metropolitan a
Aurangabad, Kaimur & Rohtas a
Begusarai a
Gaya & Nalanda a
Diu & Gir Somnath
Surendranagar a
Barwala & Ranpur Talukas a
Navsari, Surat, Tapi & The Dangs a
Junagadh a
Kheda, Morbi & Mahisagar a
Narmada (Rajpipla) a
Porbandar a
Panchkula , Sirmaur, Shimla & Solan a
Bhiwani, Charkhi Dadri & Mahendragarh a
Hisar a
Jhajjar a
Sonipat & Jind a
Nuh & Palwal a
Bilaspur, Hamirpur & Una a
Bokaro, Hazaribagh & Ramgarh a
Giridih & Dhanbad a
Chitradurga & Davanagere a
Udupi a
Ballari & Gadag a
Bidar a
Dakshina Kannada a
Ramanagara a
Kozhikode & Wayanad a
Malappuram a
Kannur, Kasaragod & Mahe a
Palakkad & Thrissur a
Bhopal & Rajgarh Districts a
Guna District a
Rewa District a
Satna & Shahdol Districts a
Ahmednagar & Aurangabad Districts a
Valsad, Dhule & Nashik Districts a
Latur & Osmanabad Districts a
Sangli & Satara Districts a
Sindhudurg District a
Angul & Dhekanal Districts a
Round 9
CITY GAS DISTRIBUTION
Edelweiss Securities Limited
8 Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset
Areas offered in earlier ten rounds (contd.)
Source: Edelweiss Research
Round Areas offered Areas bid
Muzaffarpur, Vaishali, Saran and Samastipur Districts a
Nadia and North 24 Parganas Districts a
Chittoor, Kolar and Vellore Districts a
Araria, Purnia, Katihar and Kishanganj Districts a
Alappuzha, Kollam and Thiruvananthapuram Districts a
Darjeeling, Jalpaiguri and Uttar Dinajpur Districts a
Anantapur and YSR (Kadapa) Districts a
Azamgarh,Mau and Ballia Districts a
Howrah (Except Area already authorized) and Hooghly (Except Area already authorized) Districtsa
Mysuru, Mandya and Chamarajanagar District a
South 24 Parganas Districts a
Farrukhabad, Etah and Hardoi Districts a
Jaunpur And Ghazipur Districts a
Bareilly (Except area already authorized), Pil ibhit and Rampur Districts a
Ajmer, Pali and Rajsamand Districts a
Jhabua, Banswara, Ratlam and Dungarpur Districts a
Shahjahanpur and Budaun Districts a
Jhansi,Bhind,Jalaun, Lalitpur and Datia Districts a
Gonda And Barabanki Districts a
Khagaria, Saharsa And Madhepura Districts a
Uttara Kannada, Haveri and Shivamogga Districts a
Anuppur, Bilaspur and Korba Districts a
Mirzapur, Chandauli and Sonbhadra Districts a
Lakhisarai, Munger And Bhagalpur Districts a
Bagalkot, Koppal and Raichur Districts a
Arwal, Jehanabad, Bhojpur And Buxar Districts a
Kalaburagi and Vijayapura Districts a
Chikkamagaluru, Hassan and Kodagu Districts a
Raisen, Shajapur And Sehore Districts a
Bijnor and Nainital Districts a
Sri Potti Sriramulu Nellore District a
Ujjain (Except area already authorized), Dewas (Except area already authorized) And Indore (Except area already authorized) Districtsa
Basti and Ambedkar Nagar Districts a
Deoghar, Sheikhpura And Jamui Districts a
Kanpur (Except Area Already Authorized), Fatehpur And Hamirpur Districts a
Mainpuri And Kannauj Districts a
Sirsa, Fatehabad and Mansa (Punjab) Districts a
Hoshiarpur And Gurdaspur Districts a
Chatra And Palamu Districts a
Jalore and Sirohi Districts a
Ferozpur, Faridkot and Sri Muktsar Sahib Districts a
Sidhi And Singrauli Districts a
Nawad and Koderma Districts a
Morena District a
Shivpuri District a
Gwalior (Accept area already authorized) and Sheopur Districts a
West Singhbhum Districts a
Seraikela and Kharsawan Districts a
Kaithal District a
Ashoknagar District a
Round 10
Edelweiss Securities Limited
CITY GAS DISTRIBUTION
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset 9
India’s gas infrastructure map
Source: Edelweiss Research
All price charts cannot be included given the large of number of companies in our coverage. Specific charts may be available upon request
CITY GAS DISTRIBUTION
Edelweiss Securities Limited
10 Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset
DISCLAIMER Edelweiss Securities Limited (“ESL” or “Research Entity”) is regulated by the Securities and Exchange Board of India (“SEBI”) and is licensed to carry on the business of broking, Investment Adviser, Research Analyst and related activities.
This Report has been prepared by Edelweiss Securities Limited in the capacity of a Research Analyst having SEBI Registration No.INH200000121 and distributed as per SEBI (Research Analysts) Regulations 2014. This report does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 includes Financial Instruments and Currency Derivatives. The information contained herein is from publicly available data or other sources believed to be reliable. This report is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this report should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in Securities referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. The investment discussed or views expressed may not be suitable for all investors.
This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ESL and associates / group companies to any registration or licensing requirements within such jurisdiction. The distribution of this report in certain jurisdictions may be restricted by law, and persons in whose possession this report comes, should observe, any such restrictions. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. ESL reserves the right to make modifications and alterations to this statement as may be required from time to time. ESL or any of its associates / group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. ESL is committed to providing independent and transparent recommendation to its clients. Neither ESL nor any of its associates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including loss of revenue or lost profits that may arise from or in connection with the use of the information. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. Past performance is not necessarily a guide to future performance .The disclosures of interest statements incorporated in this report are provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. The information provided in these reports remains, unless otherwise stated, the copyright of ESL. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright of ESL and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.
ESL shall not be liable for any delay or any other interruption which may occur in presenting the data due to any reason including network (Internet) reasons or snags in the system, break down of the system or any other equipment, server breakdown, maintenance shutdown, breakdown of communication services or inability of the ESL to present the data. In no event shall ESL be liable for any damages, including without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with the data presented by the ESL through this report.
We offer our research services to clients as well as our prospects. Though this report is disseminated to all the customers simultaneously, not all customers may receive this report at the same time. We will not treat recipients as customers by virtue of their receiving this report.
ESL and its associates, officer, directors, and employees, research analyst (including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the
Securities, mentioned herein or (b) be engaged in any other transaction involving such Securities and earn brokerage or other compensation or act as a market maker in the financial
instruments of the subject company/company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) or have other potential/material conflict of interest with
respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance. ESL may have proprietary long/short
position in the above mentioned scrip(s) and therefore should be considered as interested. The views provided herein are general in nature and do not consider risk appetite or investment
objective of any particular investor; readers are requested to take independent professional advice before investing. This should not be construed as invitation or solicitation to do business
with ESL.
ESL or its associates may have received compensation from the subject company in the past 12 months. ESL or its associates may have managed or co-managed public offering of securities for the subject company in the past 12 months. ESL or its associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. ESL or its associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. ESL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report. Research analyst or his/her relative or ESL’s associates may have financial interest in the subject company. ESL and/or its Group Companies, their Directors, affiliates and/or employees may have interests/ positions, financial or otherwise in the Securities/Currencies and other investment products mentioned in this report. ESL, its associates, research analyst and his/her relative may have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public appearance.
Participants in foreign exchange transactions may incur risks arising from several factors, including the following: ( i) exchange rates can be volatile and are subject to large fluctuations; ( ii) the value of currencies may be affected by numerous market factors, including world and national economic, political and regulatory events, events in equity and debt markets and changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed exchange controls which could affect the value of the currency. Investors in securities such as ADRs and Currency Derivatives, whose values are affected by the currency of an underlying security, effectively assume currency risk.
Research analyst has served as an officer, director or employee of subject Company: No
ESL has financial interest in the subject companies: No
ESL’s Associates may have actual / beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report.
Research analyst or his/her relative has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No
ESL has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No
Subject company may have been client during twelve months preceding the date of distribution of the research report.
There were no instances of non-compliance by ESL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years except that ESL had submitted an offer of settlement with Securities and Exchange commission, USA (SEC) and the same has been accepted by SEC without admitting or denying the findings in relation to their charges of non registration as a broker dealer.
A graph of daily closing prices of the securities is also available at www.nseindia.com
Analyst Certification:
The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
Edelweiss Securities Limited
CITY GAS DISTRIBUTION
Edelweiss Research is also available on www.edelweissresearch.com, Bloomberg - EDEL, Thomson Reuters, and Factset 11
Additional Disclaimers
Disclaimer for U.S. Persons
This research report is a product of Edelweiss Securities Limited, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account.
This report is intended for distribution by Edelweiss Securities Limited only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor.
In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, Edelweiss Securities Limited has entered into an agreement with a U.S. registered broker-dealer, Edelweiss Financial Services Inc. ("EFSI"). Transactions in securities discussed in this research report should be effected through Edelweiss Financial Services Inc.
Disclaimer for U.K. Persons
The contents of this research report have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA"). In the United Kingdom, this research report is being distributed only to and is directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the FSMA (Financial Promotion) Order 2005 (the “Order”); (b) persons falling within Article 49(2)(a) to (d) of the Order (including high net worth companies and unincorporated associations); and (c) any other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This research report must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this research report relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this research report or any of its contents. This research report must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person. Disclaimer for Canadian Persons
This research report is a product of Edelweiss Securities Limited ("ESL"), which is the employer of the research analysts who have prepared the research report. The research analysts preparing the research report are resident outside the Canada and are not associated persons of any Canadian registered adviser and/or dealer and, therefore, the analysts are not subject to supervision by a Canadian registered adviser and/or dealer, and are not required to satisfy the regulatory licensing requirements of the Ontario Securities Commission, other Canadian provincial securities regulators, the Investment Industry Regulatory Organization of Canada and are not required to otherwise comply with Canadian rules or regulations regarding, among other things, the research analysts' business or relationship with a subject company or trading of securities by a research analyst.
This report is intended for distribution by ESL only to "Permitted Clients" (as defined in National Instrument 31-103 ("NI 31-103")) who are resident in the Province of Ontario, Canada (an "Ontario Permitted Client"). If the recipient of this report is not an Ontario Permitted Client, as specified above, then the recipient should not act upon this report and should return the report to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any Canadian person.
ESL is relying on an exemption from the adviser and/or dealer registration requirements under NI 31-103 available to certain international advisers and/or dealers. Please be advised that (i) ESL is not registered in the Province of Ontario to trade in securities nor is it registered in the Province of Ontario to provide advice with respect to securities; (ii) ESL's head office or principal place of business is located in India; (iii) all or substantially all of ESL's assets may be situated outside of Canada; (iv) there may be difficulty enforcing legal rights against ESL because of the above; and (v) the name and address of the ESL's agent for service of process in the Province of Ontario is: Bamac Services Inc., 181 Bay Street, Suite 2100, Toronto, Ontario M5J 2T3 Canada.
Disclaimer for Singapore Persons
In Singapore, this report is being distributed by Edelweiss Investment Advisors Private Limited ("EIAPL") (Co. Reg. No. 201016306H) which is a holder of a capital markets services license and an exempt financial adviser in Singapore and (ii) solely to persons who qualify as "institutional investors" or "accredited investors" as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore ("the SFA"). Pursuant to regulations 33, 34, 35 and 36 of the Financial Advisers Regulations ("FAR"), sections 25, 27 and 36 of the Financial Advisers Act, Chapter 110 of Singapore shall not apply to EIAPL when providing any financial advisory services to an accredited investor (as defined in regulation 36 of the FAR. Persons in Singapore should contact EIAPL in respect of any matter arising from, or in connection with this publication/communication. This report is not suitable for private investors.
Disclaimer for Hong Kong persons
This report is distributed in Hong Kong by Edelweiss Securities (Hong Kong) Private Limited (ESHK), a licensed corporation (BOM -874) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC) pursuant to Section 116(1) of the Securities and Futures Ordinance “SFO”. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The report also does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of any individual recipients. The Indian Analyst(s) who compile this report is/are not located in Hong Kong and is/are not licensed to carry on regulated activities in Hong Kong and does not / do not hold themselves out as being able to do so. Copyright 2009 Edelweiss Research (Edelweiss Securities Ltd). All rights reserved.
Aditya Narain
Head of Research