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Published: November 15, 2023
Updated: November 15, 2023

Mahanagar Gas Limited Firing India's Eco Dream

In keeping with the government’s vision and the country’s tryst with becoming the world’s third largest economy by 2030, it is but natural that India has a massive energy demand to fuel this aspiration. It is here that natural gas has emerged as a potent and viable source to fulfil the country’s economic ambitions. The segment that can best deliver these results is the City Gas Distribution (CGD) sector. The ‘last mile’ of the natural gas value chain, it offers availability of natural gas to virtually all segments - domestic, transport, industrial and commercial.

Mahanagar Gas Limited (MGL) fits this requirement to the hilt. Albeit serving the energy needs of Mumbai and adjoining areas, its seminal importance lies in its being a trail-blazer for other CGD players in the country with its extensive pipeline and distribution infrastructure.

It was with the idea of extending the convenience of natural gas to the people of Mumbai that Mahanagar Gas Limited (MGL) was established in 1995, with the aim of pioneering the transformation of the city’s overburdened and creaking gas distribution system. Since its inception 28 years ago, MGL has charted an impressive growth trajectory. What is more, its mission to promote the use of clean and ecofriendly fuel, while enhancing the quality of life of Mumbaikars, has set a trail-blazing path for more environment consciousness to permeate day-to-day life. It has established itself as not only one of the largest CGD companies in India but also as a key player in the energy sector.

As a leading distributor of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG), MGL is playing an instrumental role in accelerating the energy landscape’s transition to clean and sustainable energy. Indeed, MGL’s remarkable growth journey and the impact it has made on the communities it serves presents a remarkable case study for others to emulate.

MGL operates in the metropolitan city of Mumbai and adjoining areas of Thane, MiraBhayander, Navi Mumbai and Raigad, catering to a vast consumer base that includes households, commercial & industrial establishments, and automotive vehicles. In its journey of nearly three decades, MGL has established a robust and extensive infrastructure network in its authorised GAs (Geographical Areas). The company has invested significantly in setting up an intricate steel and polyethylene pipeline network of more than 6,600 kilometres that spans its operational areas, ensuring a seamless supply of natural gas. Its pipeline infrastructure has not only facilitated the distribution of PNG but has also enabled the widespread adoption of CNG as a reliable fuel option

With its 320+ CNG stations having more than 1,960 dispensing points catering to over 9.5 lakh vehicles, and a PNG network reaching more than 22 lakh households and above 4,600 industrial and commercial establishments, MGL has played a pivotal role in reducing the carbon footprint and improving air quality in the region.

To cater to the growing demand for natural gas and to enhance the security of supply to its CGD network, MGL has set up five City Gate Stations (CGS) at strategic locations and is spreading its gas distribution network in its authorised areas. In addition to its CGS located at Sion in Mumbai, Mahape in Navi Mumbai, Taloja and Ambernath, MGL commissioned in February 2023 its CGS at Savroli in Raigad district, which is the fifth CGS in its network area and its first CGS in Raigad district.

SHARE PURCHASE AGREEMENT

The recent Share Purchase Agreement (SPA) for acquisition of Unison Enviro Private Limited for Rs 531 crore is expected to further expand MGL’s geographical presence and strengthen the core business. This proposed acquisition (subject to regulatory approval) will enable MGL to expand to newer geographical areas in Maharashtra’s Ratnagiri, Latur and Osmanabad districts and Karnataka’s Chitradurga and Davengere districts. With this first inorganic growth initiative, MGL is set to develop new avenues for long-term volume growth.

MGL’s financial growth continues to be buoyant and unparalleled. The company has reported Rs 6,921 crore in net revenue from operations in FY23 and an EBITDA of Rs 1,184 crore. On a similar upward trend, MGL booked net profit of Rs 790 crore in FY23, an increase of 32% in comparison to the previous financial year. Its domestic connectivity additions for FY23 touched 3,05,000+, which was among the highest PNG connections by CGDs across the country.

At the core of MGL’s operations lies its commitment to customer satisfaction and safety, which has helped it in earning customer trust and loyalty. The company has consistently focused on providing reliable and uninterrupted energy supply, adhering to the highest safety standards, while ensuring transparency and accountability. MGL’s emphasis on customer-centric operations is reflected in its efficient and prompt response to service-related issues, and equally efficient real-time complaint redressal mechanisms.

In keeping with the times, MGL has embraced techno logical advancements and innovation, and leveraged digital platforms and self-metering solutions to enhance operational efficiency, streamline billing processes, and empower customers with real-time data

MGL is also cognizant of the government’s vision of expanding the coverage and infrastructural reach of natural gas in India. It has actively pursued strategic partnerships and collaborations with various stakeholders, including government organisations, to promote the use of natural gas as a cleaner and greener energy alternative. This has not only helped further the growth of MGL but has also contributed towards developing awareness about adoption of natural gas.

Maintains Mr. Ashu Shinghal, Managing Director “Our strategic focus at MGL, centres on ensuring financial prudence alongside sustainable growth. By leveraging operational efficiency and prudent financial management, we continuously strive to optimize cost structures, enhance revenue streams, and maximize returns for our stakeholders.

MGL has been a market leader in the Indian CGD industry, having actively contributed to the development of this industry over the years. Our firm commitment to maintaining a robust financial position empowers us to invest in infrastructure development, technological advancements, and innovative solutions, thus reinforcing our position as a key player in the dynamic energy sector.”

Points out Mr. Sanjay Shende Deputy Managing Director MGL “Amidst the evolving energy landscape, MGL remains committed to deliver sus-tainable and accessible natural gas solutions, fostering economic resilience and environmental stewardship within its operational areas. Our efforts not only focus on meeting the energy needs of the region but also prioritize sustainability, aiming to reduce the environmental impact while bolstering the local economy. Through our unwavering dedication to providing reliable and eco-friendly energy solutions, we strive to contribute to the overall well-being and development of the communities we serve.”

COMMUNITY OUTREACH

In line with its core belief system to give back to society, MGL’s Corporate Social Responsibility programme strives to augment its commitment towards environmental preservation, creation of well-rounded and empowered individuals, social upliftment and sustainable community development. At MGL, CSR is not just a statutory obligation but a moral duty. Through various initiatives, it has impacted more than 2 lakh lives. In FY 2022-23, around Rs 17 crore were allocated through various initiatives categorized under MGL Aarogya, MGL Vikas, MGL Saksham, MGL Vidya, MGL Hunar and MGL Hariyali. During the pandemic, MGL demonstrated solidarity by assisting economically weaker sections of society in the fight against Covid-19, from medical equipment to daily meal and ration kits.

EMERGING OPPORTUNITIES

The company has made rapid strides on the financial performance front. During the last 12 years, its sales turnover has expanded from Rs. 1309 crore in the fiscal year 2012 to Rs. 6299 crore in the fiscal 2023 with operating profit shooting up from Rs. 499 crore to Rs. 1184 crore and the profit at net level spurting from Rs. 308 crore to Rs. 790 crore. The company's financial position is very strong with reserves at the end of March 2023 standing at Rs. 4581 crore - over 46 times its equity capital of Rs. 99 crore.

The company is now poised for continued growth and expansion. With the government’s increasing emphasis on clean energy and the rising demand for natural gas, MGL is well-positioned to capitalise on emerging opportunities. The recent MoU with Brihanmumbai Municipal Corporation (BMC) for setting up a Compressed Biogas (CBG) plant in Mumbai, and the Joint Venture agreement with Baidyanath LNG to enable the development of a LNG station network across various strategic locations, are a testament to this growth drive.

MoU FOR CBG. PLANT

MGL has partnered with BMC for setting up the largest CBG plant in Asia with a capacity to process 1,000 tonnes of segregated wet municipal waste per day. This will help reduce the emissions of methane from landfills, develop alternative sources for natural gas, making Mumbai a greener and healthier city, and will also help in generation of local employment, development of a circular economy and achieving the company’s sustainable development goals.

PARTNERING FOR L.N.G. NETWORK

Additionally, the MoU with Baidyanath LNG will help in developing the supply side LNG retailing corridor ecosystem and provide a more efficient energy option to the transportation sector. MGL’s growth journey is a result of its unwavering commitment to providing clean and sustainable energy solutions. The company remains dedicated to its vision of creating a sustainable and green future, while delivering value to its customers.

Through its focus on infrastructure development, customer satisfaction, technological innovation, strategic collaborations and CSR initiatives, MGL has emerged as a frontrunner in the natural gas sector. In the coming years, as it continues to evolve and expand, MGL is set to play a pivotal role in driving the adoption of natural gas and shaping the future of clean energy consumption in India.