Tokyo Gas joins to acquire stake in Think Gas Distribution.

Japan's largest supplier of city gas, Tokyo Gas, has joined the race to acquire a minority stake in Indian natural gas supplier Think Gas Distribution, owned by private equity fund I Squared Capital, two people with knowledge of the development report.

Founded in 1885, Tokyo Gas is a supplier of municipal gas in the Tokyo Metropolitan Area and the surrounding Kanto region. Tokyo Gas is currently conducting a preliminary analysis of the project, sources said.

The potential investor will acquire about 30% stake in Think Gas, valuing the company in the range of $1 billion to $1.2 billion. Investment bank Barclays is advising I Squared on the stake sale process.

The biggest competitor for the minority stake is United Arab Emirates sovereign wealth fund Mubadala Investment. Mubadala Investment and several Japanese investors, including Sumitomo, are also bidding for a 30% stake in Think Gas Distribution, as first reported by Economic Times on May 12.

Think Gas, founded by I Squared in 2018, operates in 13 districts in India and supplies natural gas to the domestic, commercial, industrial and automotive sectors. Headquartered in Delhi NCR, Think Gas has over 80 gas refueling stations and serves over 30,000 customers daily, according to the company's official website.

The other major players in the urban gas supply business are private companies Adani Total Gas and Torrent Gas, and state-owned Mahanagar Gas and Indraprastha Gas.

I Squared Capital operates the urban gas supply business in India through its Think Gas and AG&P Pratham platforms. I Squared plans to merge the Think and AG& businesses;

Emails have been sent to I Squared and Tokyo Gas, but no response has yet been received up to the time of publication of this article.

AG&P has 12-year exclusive concessions for 25 years in five states of India - Rajasthan, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, while Think Gas has seven licenses to operate in 13 districts of India in the states of Punjab, Madhya Pradesh, Bihar, Uttar Pradesh and Himachal Pradesh.

Tokyo Gas will spend two trillion yen ($17.5 billion) on clean fuels such as hydrogen and renewable energy with the aim of doubling its profits to 200 billion yen by 2030, according to a recent Reuters report. Tokyo Gas and other utilities are boosting their overseas presence as demand falls in Japan, where an aging population and declining birth rate and liberalization of the energy market is spurring competition among old-guard businesses, according to a report.

The $22 billion Tokyo Gas company is engaged in a variety of businesses, including electricity generation, energy retail, engineering solutions, gas feedstock and real estate development.

Demand for natural gas in India is set to increase at a compound annual growth rate of 8%, and the Indian government is looking at providing access to gas to about 70% of the country's population by 2025. The pipeline infrastructure is planned to quadruple and CNG refueling stations to triple by 2025, according to the Ministry of Petroleum and Natural Gas.

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