GAIL Capex Plans

Gail India has outlined its plans to direct a sum of Rs 10,000 crore towards capital expenditure for FY24. The decision was disclosed by SK Gupta, the Chairman and Managing Director of the company, during a press conference on 19 May 2023.

In order to underwrite this ambitious plan, Gail will reportedly look towards domestic borrowing, aiming to raise between Rs 5,000 crore and Rs 7,000 crore. This forecasted buoyancy comes despite a somewhat underwhelming FY23, during which the firm managed to invest an impressive Rs 9,100 crore – an amount 15 percent greater than budgeted levels.

Elaborating on the company’s borrowing strategy, RK Jain, the Director of Finance, stated that in alignment with the current global financial landscape, the firm will predominantly seek domestic borrowings rather than exploring international markets. A quarter of the borrowing will be constituted by bonds, as per the SEBI mandate, with the remainder coming from bank borrowings.

Currently, Gail India’s total long-term debt is estimated at Rs 9,800 crore, with plans for the new bank borrowings to extend over a five-year term. Jain disclosed that Gail India is already active in the domestic market, seeking to raise Rs 1,500 crore.

During the press conference the Chairman and MD also informed that Gail India has begun legal proceedings against Russian energy titan Gazprom. This comes in response to Gazprom’s failure to supply Liquefied Natural Gas (LNG).

As per data from Projects Today, Gail India has been engaged in 83 projects as of 30 April 2023, with total investments summing up to Rs 70,830 crore. Among these, 43 are associated with Oil & Gas pipeline and distribution, commanding an investment commitment of Rs 30,644 crore. The company is also directing significant funds towards Petrochemicals (Rs 15,751 crore) and Electricity (Rs 12,500 crore).

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