Hyderabad-based Megha Engineering and Infrastructures (MEIL), the second-largest purchaser of electoral bonds amounting to Rs 9.66 billion and facing corruption allegations, has decided to put its city gas distribution business on sale.

A wholly-owned subsidiary, Megha City Gas Distribution (MCGDPL), has made the decision to consolidate operations and has approached state-run Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp, and Indraprastha Gas, among others.

An executive familiar with the matter stated, "The companies are examining the proposal and analysing the numbers. No decision has been made yet." Another industry executive, whose company evaluated Megha City Gas' assets, mentioned that minimal groundwork had been done. He estimated the valuation to be between Rs 1,000-2,000 crore.

MEIL, a $5-billion infrastructure company with interests spanning hydrocarbons, electric buses, defense, power, transport, and manufacturing, ventured into city gas distribution as Megha Gas in 2015, operating under the MEIL name until FY22.

In September 2022, MEIL transferred the business to MCGDPL, which holds licenses for setting up city gas distribution networks in 62 districts across 10 states.

"A lot of companies had shown keen interest in city gas distribution due to its potential," mentioned a senior executive from an energy company that evaluated the Megha City Gas proposal. "MCGDPL was one of them. However, they are now realising the significant capital requirements to fulfill their minimum work program."

The executive further added, "As a result, they are planning to sell the business."