Gujarat State Petronet (GSPL) India holds around 54 percent stake in Gujarat Gas. Gujarat Gas has outperformed but that performance is not seen in GSPL so far.

The value of Gujarat Gas holding in GSPL is at Rs 19,700 crore as per the current market price, which is much higher than current GSPL’s market capitalization.

Therefore, major concern according to Motilal Oswal for the above difference is – they expected a decline in tariffs for GSPL in their grid and the other concern is over the usage of cash because the parent of GSPL that is Gujarat State Petroleum Corporation (GSPC) is debt-ridden and there is a fear that the company will not be able to cater to investors’ need but the parent need and that is why the stock has been underperforming.

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(Edited by : Bivekananda Biswas)