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OIL stocks up 2% after it announces Rs 1,738 cr equity investment in NE gas distribution venture

The board of Oil India Ltd (OIL) has approved an equity investment of Rs 1,738 crore in North East Gas Distribution Company Limited (NEGDCL), a joint venture between OIL and state-run Assam Gas Company Ltd. The fund infusion is expected to give a boost to NEGDCL’s piped natural gas distribution plans in Assam and Tripura and setting up of CNG stations.

“Board of Directors of the Company at its meeting held today i.e. on Monday, 04th September, 2023, has accorded its approval for equity contribution of upto Rs. 1738 Crore by Oil India Limited (OIL) in line with OIL s shareholding percentage [49%] in the Joint Venture Company (JVC) with Assam Gas Company Limited (AGCL) [51%] viz. ‘North East Gas Distribution Company Limited (NEGDCL)’ [a State Govt. Company], incorporated for executing the City Gas Distribution (CGD) projects,” the regulatory filing on NSE said.

OIL stocks gained close to 2% in early morning trade today, post the announcement. Oil India’s shares were trading at 1.8% higher on the NSE in the opening hours of trade today.

Public sector undertaking, Oil India Limited, holds 49 percent shareholding in NEGDCL. The remaining 51 percent stake in the JV is held by Assam Gas Company. NEGDCL was incorporated in July this year for the distribution of piped natural gas in the Northeastern states.

As per the agreement inked by OIL and Assam Gas Company in April this year, NEGDCL would build local natural gas grids and provide piped natural gas to domestic and commercial establishments in Lakhimpur, Dhemaji, Darrang, Udalguri, Sonitpur and Biswanath Chariali in Assam, and a few districts of Tripura. NEGDCL will also set up numerous compressed natural gas (CNG) stations. The investment is expected to give a boost to NEGDCL’s plans.

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Northeast Live Digital Desk

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