Gujarat State Petronet shares: GSPL's largest MF investor sells 1.37% stake in Monday's selloff

Mirae Asset Mutual Fund, which has been the largest mutual fund investor in Gujarat State Petronet Ltd (GSPL), sold 77,35,000 shares, or 1.37 stake, in the PSU on Monday, GSPL informed stock exchanges today. The stake sale came amid a 20 per cent selloff yesterday, as investors reacted negatively to PNGRB's pipeline tariff review for the PSU's High Pressure Gujarat Gas Grid Network. In its review,  the regulated set tariff at 47 per cent lower the prevailing level and were off tariffs sought by GSPL.

Mirae Asset Mutual Fund held 4,83,53,196 shares, or 8.57 per cent, stake in GSPL at the end of March quarter. It further cut its stake to 4,65,69,163 shares or 8.25 per cent, before selling further GSPL shares. It is now left with 3,88,34,163 shares, or 6.88 per cent, stake in the PSU firm.

Mirae had earlier cut its stake in GSPL by 91 basis points in the March quarter. Mirae held as high as 9.48 per cent stake in Gujarat State Petronet in the December quarter, but has been cutting stake since.  A total of 25 MFs held 22.31 per cent stake in GSPL in the March quarter.

ICICI Securities said PNGRB disagreed materially with the GSPL on almost all tariff parameters, cutting assumptions on capex, opex and applicable volumes, driving the steep change.

"While Gujarat State Petronet may choose to appeal the sharp cuts and ask for a review/revision etc., prima facie this is a material hit to earnings for GSPL. Applying this revised tariff to FY25–26E implies a massive 44–45 per cent reduction to FY25/26E EPS against previous estimates with a relatively lower cut to target price due to appreciation in Gujarat Gas' stock price," it said while suggesting a 'Sell' on the stock with a revised target price of Rs 304 from Rs 395.

Emkay Global downgraded the stock to 'Reduce' from 'Buy', as the long-awaited HP grid tariff revision came as a major negative surprise. It noted that the effective cut against FY19 blended book rate is hence 37 per cent.

On Tuesday, the stock settled at Rs 301.65, down 0.7 per cent.