GAIL (India) has approved the proposed public listing of its city gas distribution arm GAIL Gas, setting the stage for an initial public offering in which the state-run utility could dilute up to 25% of its stake. The IPO is expected to be launched in FY28, subject to further approvals and decisions on valuation, pricing and the offer structure.
GAIL said in a filing to the BSE that its board gave in-principle approval for listing shares of GAIL Gas, a wholly owned subsidiary, on Indian stock exchanges through the IPO route. The final extent of dilution and other terms will be considered after GAIL Gas submits a proposal based on recommendations from the appointed Book Running Lead Manager.
The proposed listing comes as GAIL Gas continues to implement city gas distribution projects in 16 geographical areas. The company is also pursuing CGD operations through joint ventures in Andhra Pradesh, Rajasthan, Vadodara in Gujarat, Haridwar in Uttarakhand, North Goa and Assam.
A public listing could give the CGD arm a separate market identity and provide a route for raising capital for network development, although the final structure, valuation and timing have not yet been decided. GAIL’s board will need to approve the final dilution, issue modality and other conditions before the IPO can proceed.
The announcement was made alongside GAIL’s quarterly results. The company reported consolidated net profit of around ₹4,724 crore in the second quarter of FY27, more than double the ₹1,989 crore recorded in the same quarter a year earlier. Profit in the first quarter of FY27 was ₹4,671 crore.
Consolidated total income rose to around ₹47,474 crore in the quarter from ₹35,894 crore in the corresponding period of the previous year and ₹41,483 crore in the preceding quarter. Total expenses increased to ₹41,645 crore, compared with ₹33,608 crore a year earlier and ₹35,558 crore in the first quarter.
GAIL said its transmission and natural gas marketing businesses delivered resilient performance, with robust volumes across major segments despite geopolitical pressures. Natural gas transmission volume increased to 130.10 million standard cubic metres per day in the quarter from 122.36 million standard cubic metres per day a year earlier. Gas marketing volume rose to 97.23 million standard cubic metres per day from 93.82 million standard cubic metres per day.
LPG transmission volume also increased to 1,130 thousand tonnes from 1,077 thousand tonnes. The company incurred capital expenditure of ₹1,425 crore during the quarter, taking cumulative expenditure in the first half of FY27 to ₹7,600 crore against an annual plan of around ₹12,900 crore.
GAIL said LNG supplies from the Middle East had been disrupted from March 2026 because of the geopolitical situation in West Asia. Following a force majeure declaration by Petronet LNG on March 3, 2026, regasified liquefied natural gas allocation to GAIL under the contract was reduced to zero from March 4 and continued at that level, the company said.
The company added that around 190 million standard cubic metres of RLNG was supplied by Petronet LNG during the half year ended September 30, 2026, based on supplies from its upstream supplier. GAIL said it had procured LNG and natural gas from spot markets and alternative sources to manage the disruption.
GAIL chairman and managing director Deepak Gupta said the company had prioritised uninterrupted supplies while focusing on operational efficiency and business resilience. The next formal milestones for the GAIL Gas IPO will be the submission of the proposal based on merchant banker recommendations and subsequent approval by GAIL’s board of the final issue terms.
