CRISIL Reaffirms AAA/Stable Rating for Gujarat Gas Bank Facilities Worth ₹3,350 Crore

Mumbai: CRISIL Ratings Limited has reaffirmed the ‘CRISIL AAA/Stable’ rating on the long-term bank facilities of Gujarat Gas Limited, reflecting the company’s strong business and financial risk profile.

According to the rating rationale released on 9 March 2026, the reaffirmation covers bank loan facilities amounting to ₹3,350 crore. The rating agency highlighted the company’s leadership position in the city gas distribution (CGD) sector and its strong financial metrics as key factors supporting the rating.

The rating also factors in the expected merger of Gujarat State Petroleum Corporation, Gujarat State Petronet Limited, and GSPC Energy Limited with Gujarat Gas. Following the merger, the combined entity is expected to become the largest CGD player in India, with enhanced scale and synergies in the natural gas trading business.

CRISIL noted that the merger process is nearing completion and is awaiting the final order from the Ministry of Corporate Affairs after a hearing held on 18 February 2026. Subsequently, the transmission business is expected to be demerged and listed separately as Gujarat Transmission Ltd within the next 6–7 months.

The rating agency also cited Gujarat Gas’s strong market presence, with 27 CGD licences across 44 districts in six states and one Union Territory, serving over 23 lakh domestic customers, 833 CNG stations, and nearly 4,400 industrial units.

Financially, both Gujarat Gas and GSPC remain debt-free, supported by strong cash accruals and healthy liquidity. The company is expected to generate annual cash accruals of ₹1,000–1,100 crore, sufficient to fund its planned capital expenditure of ₹800–1,000 crore.

However, CRISIL cautioned that the company faces certain risks, including volatility in natural gas prices, potential supply disruptions from Middle East sources, and competition from alternate fuels in the industrial segment.

Despite these challenges, CRISIL maintains a Stable outlook, indicating that the merged entity is likely to sustain strong operating performance and retain its market-leading position in the CGD sector.