GSPL Transmission Limited to fund Rs 3,500 crore from cash

GSPL Transmission Limited expects to fund most of its Rs 3,500 crore pipeline expansion from internal accruals and existing cash balances over the next two to two-and-a-half years, management said on November 4, 2026, supported by a debt-free balance sheet and approximately Rs 1,800 crore of net cash.

How will GTL fund its Rs 3,500 crore expansion?

GTL expects internal accruals and current cash balances to meet the main funding requirement for its Rs 3,500 crore expansion programme. Chief Financial Officer Lokesh Agarwal said limited financing would be considered only if required, although an analyst noted that pipeline projects have generally used a funding mix of about 70% debt and 30% equity.

Management did not set a debt-to-equity ratio for the programme. Agarwal said GTL would continue to evaluate funding options as its project book develops and could raise debt if another material opportunity arises, but added that the company was not short of funds and debt was not a priority at the time of the call.

The plan is spread over another two to 2.5 years rather than requiring an immediate Rs 3,500 crore outlay. Management said every project in the programme had board approval and was in execution at different stages, so it did not expect to need subsequent approvals to carry out the current projects.

What does GTL's expansion programme include?

GTL's Rs 3,500 crore programme covers more than 10 pipeline and connectivity projects aggregating 700 kilometres. The additions are expected to increase its Gujarat network from about 2,900 kilometres to 3,600 kilometres, building on a network that management said serves more than 100 customers through over 200 exit points.

The largest disclosed contract is the Anjar-Palanpur Pipeline Project, for which GTL awarded engineering, procurement and construction, or EPC, contracts worth Rs 1,800 crore in July 2026. Other projects under implementation include Jamnagar-Dwarka, Vapi-Tarapur, Dahej-Bhadbhut, multiple spur lines and customer-connectivity projects.

GTL executed about Rs 300 crore of capital expenditure, or capex, in H1 FY27. That was about 8.6% of the announced Rs 3,500 crore programme, although management did not disclose a project-by-project allocation of this spending or individual commissioning dates.

What financial resources does GTL have for the programme?

GTL was debt-free at September 30, 2026, with net worth of approximately Rs 7,150 crore, management said. It also had approximately Rs 1,800 crore of net cash, including deposits, and Agarwal said the large majority belonged to GTL rather than representing customer deposits.

Management said GTL already had significant financing approvals in place and would not need further approvals to execute the existing project portfolio. Those approvals leave open the option to borrow later, but management did not say it had committed to debt funding for the present Rs 3,500 crore programme.

GTL reported standalone revenue from operations of Rs 290 crore in Q2 FY27, up 8% from Rs 267 crore in Q2 FY26 and 4.5% from Rs 277 crore in Q1 FY27. H1 FY27 revenue reached Rs 567 crore against Rs 542 crore a year earlier, providing the operating base management cited in discussing internal funding capacity.

How does GTL's operating performance support internal funding?

GTL reported standalone profit after tax of Rs 120 crore in Q2 FY27, compared with Rs 118 crore in Q2 FY26, while H1 FY27 profit after tax was Rs 258 crore versus Rs 255 crore. Earnings before interest, tax, depreciation and amortisation, or EBITDA, excluding non-operating income mainly from deposit interest, was approximately Rs 169 crore in Q2 FY27 against Rs 168 crore a year earlier.

Revenue grew faster than quarterly EBITDA in Q2 FY27: revenue increased 8%, while EBITDA increased by approximately Rs 1 crore and the EBITDA margin was 58.4%. In H1 FY27, EBITDA was Rs 362.9 crore compared with Rs 363.5 crore in H1 FY26, while the EBITDA margin was 64%, which management said was in line with the prior-year half.

Transportation volumes rose alongside revenue. Overall contractual volumes increased 12% to 45 million metric standard cubic metres per day, or MMSCMD, in Q2 FY27 from 40 MMSCMD in Q2 FY26; high-pressure grid volumes increased 9%, low-pressure grid volumes rose 30%, and HAPi grid volumes grew 16%.

When could GTL complete the capex and add capacity?

GTL expects to complete approximately Rs 3,000 crore of the Rs 3,500 crore programme by March 2028, with part of the balance potentially spilling into April, May or June 2028. Management described this timetable as achievable, but it remains a management plan rather than a completed construction schedule.

Current pipeline capacity is around 36.5 MMSCMD, and GTL expects the expansion to add about 8 MMSCMD to 9 MMSCMD. This would take capacity to roughly 44.5 MMSCMD to 45.5 MMSCMD, compared with reported Q2 FY27 contractual volumes of 45 MMSCMD across its grids.

The next tariff revision is expected around 2028, following the previous revision in April 2024. Management declined to estimate the tariff outcome, saying the Petroleum and Natural Gas Regulatory Board, or PNGRB, would decide it after considering matters including pipeline-life review, certification where required and regulatory assessment.

Conclusion

GTL's disclosed funding approach combines a debt-free balance sheet, approximately Rs 1,800 crore of net cash and internal accruals to execute a Rs 3,500 crore network expansion. The programme would add 700 kilometres to the Gujarat network and is intended to raise capacity by about 8 MMSCMD to 9 MMSCMD from the current 36.5 MMSCMD.

The next milestones are management's target to complete approximately Rs 3,000 crore of capex by March 2028, potential completion of the remaining spend by June 2028, and the expected tariff revision around 2028. Management has also retained the option to use debt if its project requirements or project book changes materially.