Gujarat Gas restructuring 2026: GSPC-GSPL merger plan

What has been proposed and why it matters

Gujarat’s state-linked gas companies are in the middle of a composite restructuring that consolidates multiple businesses into Gujarat Gas Ltd (GGL) and separates the gas transmission business into GSPL Transmission Ltd (GTL). The structure is designed to merge Gujarat State Petroleum Corporation (GSPC), Gujarat State Petronet Ltd (GSPL) and GSPC Energy Ltd (GEL) into GGL, and then demerge pipeline transmission into GTL. If completed as laid out, the transaction would place GGL at the centre of the group’s integrated gas activities, while leaving GTL as the vehicle for regulated gas transmission. The scheme has been discussed in investor communications and has moved through multiple regulatory and shareholder steps. GSPL has also disclosed technical revisions to the draft scheme after directions from the Ministry of Corporate Affairs (MCA). The developments matter for shareholders and stakeholders because the exercise changes corporate structures, shareholding links, and the location of licences, contracts and proceedings across entities.

The key parties in the composite scheme

GSPC is described as an unlisted company engaged in natural gas trading, with interests in 11 operating exploration and production blocks and wind power. GSPL is a listed entity primarily engaged in natural gas transmission through pipelines on an open-access basis. GGL is the transferee and demerged company under the scheme and is positioned as the group’s integrated gas platform, combining city gas distribution (CGD) and trading authorisations. GTL is a wholly owned subsidiary that will house the gas transmission undertaking after the demerger and will operate transmission pipelines on an open-access basis. The scheme also includes GEL, which is merged into GGL.

How the deal is structured: merger first, demerger later

The scheme’s sequence merges GSPC, GSPL and GEL into GGL, and then demerges the gas transmission undertaking into GTL. Under the scheme, GSPL’s joint ventures, India Gasnet and India Transco, are first transferred to GGL as part of the “Undertaking”. Subsequently, the transmission business is transferred from GGL to GTL as part of the gas transmission business undertaking being demerged. The scheme’s design is also intended to remove related-party transactions, which the source material links to improving profitability and strengthening metrics such as return on capital employed (ROCE), return on equity (ROE) and EBITDA margins. It also states that GGL will assume all of GSPC’s long-term contracts as part of the consolidation.

Share swap ratios and who receives what

The disclosed exchange ratios lay out how shareholders move into GGL and how GGL shareholders receive GTL shares after the demerger. GEL does not result in new issuance because it becomes a wholly owned subsidiary post the GSPC merger, as described in the material.

Operational continuity: employees, management and contracts

The scheme states that all employees of GSPC, GSPL and GEL are absorbed into GGL with continuity of service. It also indicates continuity in management, with the existing management of GGL continuing to lead the merged business. The GSPL transmission management is expected to transition to GTL, with the stated aim of uninterrupted operational continuity. On commercial arrangements, GGL is set to assume GSPC’s long-term contracts under the scheme. This framing is consistent with the objective described in investor materials of using one entity to deploy cash flows more efficiently, improve profitability and utilise USD 857.9 million in tax losses.

Legal and regulatory pathway: MCA route, not the usual NCLT track

A notable feature described in the material is that the scheme’s approval path did not follow the conventional National Company Law Tribunal (NCLT) route under Sections 230 to 232 of the Companies Act, 2013. Instead, approval was sought directly from the Central Government pursuant to a notification dated 13 June 2017 issued under Section 462 of the Companies Act, which grants exemptions to government companies. As per the material, the MCA issued an order on 10 September 2025 to convene shareholder meetings and allow the scheme to proceed.

Sector approvals: PNGRB, CCI exemption and stock exchange process

On sector regulation, the material says the merger and demerger comply with the Petroleum and Natural Gas Regulatory Board Act, 2006 (PNGRB Act). Under this approach, GGL retains its CGD and trading authorisations, while GSPL’s transmission licences shift to GTL with PNGRB approval, and no new licences are needed though ongoing compliance continues. On competition law, the material cites Item 10 of the Competition (Criteria for Exemption of Combinations) Rules, 2024, which waives CCI approval for intra-group mergers without a change in control. It notes that the Gujarat Government held 95% voting rights in GSPC before the deal, and after the scheme it retained 55.07% in GGL along with the right to appoint a board majority, supporting the argument that “control” remains unchanged and the transaction is exempt from CCI approval. Separately, the scheme was required to comply with SEBI LODR, and the draft was filed with stock exchanges with no-objection letters obtained before filing with the MCA.

MCA-driven revisions: clauses 60 and 63 and share capital allocation

GSPL has announced revisions to its composite scheme following directions from the MCA. The revisions relate to Clauses 60 and 63 and address observations on the reallocation of authorised share capital from GGL to GTL upon demerger. The disclosures describe these changes as technical and state they do not affect the rights or entitlements of shareholders of GGL and GSPL. GSPL has submitted the revised scheme and related approvals in compliance with the MCA directives and has said it will keep stakeholders informed as the scheme progresses.

Shareholder meetings and disclosures: what has happened so far

GSPL held a meeting of equity shareholders on 17 October 2025 (4:00 PM to 4:45 PM) via video conferencing/other audio-visual means to consider and approve the composite scheme, citing compliance with an MCA order dated 10 September 2025. The scheme was approved by the requisite statutory majority, and the board was authorised to take necessary actions to implement the arrangement. Separately, a report dated 13 January 2026 from the MCA noted that Gujarat Gas Limited had not submitted the attendance sheet of equity shareholders who attended a meeting regarding the scheme, sought certain details of unsecured creditors, and requested an undertaking to safeguard the interest of Oswal Energies Ltd upon approval of the scheme.

Accounting and balance sheet mechanics highlighted in the scheme

The scheme indicates that GGL will account for the mergers using the pooling of interest method under Ind AS 103 for business combinations of entities under common control. It also describes an internal restructuring in GSPC before its merger, involving reduction of the securities premium account and reclassification of general reserves into retained earnings. As of 1 April 2024, the material states that after the reduction and reclassification, retained earnings transferred to GGL will be positive INR 3,245.14 crore, described as free reserves in GGL’s books. It also states that a balance securities premium account of INR 803.63 crore would be transferred to GGL.

Market and investor relevance: scale, valuations and government flexibility

Investor-facing material around the scheme positions the consolidation as creating one of India’s larger integrated players across gas trading and city gas distribution, with a separate transmission entity post-demerger. The material also references an equity valuation of GGL post consolidation as likely to be circa INR 56,000 crore and notes that the cumulative value of the Government of Gujarat’s stake (directly or indirectly) in the GSPC group is circa INR 28,300 crore. Another cited data point is that, as of November 2025, GGL had a market capitalisation of about USD 1.91 billion. The scheme documentation also notes that post restructuring, the Gujarat Government would have flexibility to divest stakes in GGL and GTL.

What to watch next

Near-term attention is likely to remain on process compliance and any additional MCA or regulatory queries, given disclosures around submissions and creditor-related details. GSPL has already stated it has made revisions to Clauses 60 and 63 to address MCA observations on authorised share capital reallocation linked to the GTL demerger. Stakeholders will also track updates on the scheme’s progress and any further directions that may be issued as the restructuring moves toward implementation. Separately, investors typically monitor how licence transfers to GTL are executed under PNGRB oversight and how the consolidated entity reflects changes in accounting and reserves once the scheme becomes effective.