Several people familiar with the matter said the deal could be worth up to $1 billion.
iSquare, a US private equity firm focused on infrastructure investments, is present in the city gas distribution business in India through Think Gas Distribution and AG&P Pratham. The former also operates more than 80 CNG stations.
“iSquare will merge the Think Gas and AG&P City Gas businesses and investors will acquire a stake in the combined entity through primary and secondary investments,” said one of the sources.
The person said the combined platform could be worth more than $1 billion. “Talks are underway with investors like Mubadala and some Japanese investors,” he added. Sources said that investment bank Barclays is advising iSquare to sell its stake.
No emails had been sent to iSquare Capital, Mubadala and Sumitomo as of press time on Thursday.
Founded in 2018 by I Square, Think Gas operates in 13 regions in India providing natural gas to the domestic, commercial, industrial and automotive sectors. According to the company’s website, Think Gas is headquartered in Delhi NCR and serves more than 30,000 customers daily.
--AG&P has 12 special long-term 25-year concessions in Rajasthan, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, while Think Gas has seven licenses for operations in 13 districts in Punjab, Madhya Pradesh, Bihar, Uttar Pradesh and Himachal Pradesh.
The city’s gas distribution company, I Square, is the largest enterprise-owned platform in the country. Other major gas distribution companies in the cities include Adani Total Gas, Torrent Gas and PSU-backed companies like Mahanagar Gas and Indraprastha Gas.
Last month, Mubadala bought a significant stake in I Squared Capital’s (InvIT)-backed road infrastructure investment fund Cube Highways for about $300 million.
Other Mubadala investments in India include Tata Power Renewables, Jio Platforms and Reliance Retail.
Demand for natural gas in India is growing at a compound annual growth rate of 8% and the government is trying to increase gas access to about 70% of the population by 2025.
