The United Arab Emirates' sovereign wealth fund, Mubadala Investment, and a few Japanese investors, notably Sumitomo, are competing for a 30% interest in I Squared Capital's Indian natural gas distribution business. According to numerous sources with knowledge of the situation, the transaction will likely value the company at $1 billion.
Through Think Gas Distribution and AG&P Pratham, I Squared, a US private equity group with an emphasis on infrastructure projects, is active in India's city gas distribution market. Additionally, the former runs more than 80 CNG stations. "I Squared will combine Think Gas and AG&P City Gas Businesses, and the Investor will Pick Up Stake in the Merged Entity Through a Mix of Primary and Secondary Investment," one of the
people said. The combined platform may be valued at more than $1 billion, the source claimed. "Discussions are ongoing with investors like Mubadala and a few Japanese investors," he continued. I Squared is being advised by investment bank Barclays for the stake sale, according to sources. Up until the time of publication on Thursday, emails made to I Squared Capital, Mubadala, and Sumitomo had not received any reply. Incorporated by I Squared in 2018, Think Gas provides natural gas to the residential, commercial, industrial, and automotive sectors in 13 districts in India. According to the company website, Think Gas, which has its headquarters in Delhi NCR, serves over 30,000 consumers every day.
In Rajasthan, Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu, AG&P has 12 long-term, 25-year exclusive concessions, while Think Gas has seven operating licences spread across 13 districts in Punjab, Madhya Pradesh, Bihar, Uttar Pradesh, and Himachal Pradesh.
The largest institution-owned platform of its kind in the nation is I Squared's city gas distribution business. Other significant city gas distribution companies are Adani Total Gas, Torrent Gas, and, on the PSU-backed side, Mahanagar Gas and Indraprastha Gas. Mubadala purchased a sizable share in the $300 million I Squared Capital-backed roads infrastructure investment trust (InvIT) Cube Highways last month.
Other Indian investments made by Mubadala include Reliance Retail, Jio Platforms, and Tata Power Renewables. India's natural gas demand is growing at a CAGR of 8% and the government is trying to increase access to gas to about 70% of the population by 2025.
