Back to Back Upper Circuit Stock: This Small-cap Oil & Gas Stock Locked in 5 Per cent Upper Circuit After Re-listing on Exchange; Consolidating CBM assets with ONGC and IOC
Recently the company re-listed on the stock exchanges on March 19, 2025, has seen consistent buying interest, with no sell orders recorded over the past two trading sessions.
Prabha Energy Ltd, which recently re-listed on the stock exchanges on March 19, 2025, has seen consistent buying interest, with no sell orders recorded over the past two trading sessions. The stock price of the company locked in the 5 per cent upper circuit on Thursday and Friday. The re-listing follows a composite scheme of arrangement involving Deep Energy Resources Ltd (DERL), Savla Oil and Gas Pvt Ltd (SOGPL), and Prabha Energy Pvt Ltd, a subsidiary of DERL. Delisted in September 2024 as part of the merger process, the restructured entity has now re-entered the market under the new name, Prabha Energy Ltd.
The merger between DERL and SOGPL into Prabha Energy Ltd aims to consolidate operations, improve financial stability, and create synergies that could support long-term strategic goals. The integration brings together technical expertise and operational capabilities, positioning the company in the natural gas and coal bed methane (CBM) segments.
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Prabha Energy holds interests in two CBM blocks:
- A 25 per cent stake in the North Karanpura CBM block, in partnership with ONGC and IOC
- A 90 per cent stake in the Jharia CBM block, in collaboration with Bharat Coking Coal Ltd
These assets are expected to commence commercial production by FY26. The estimated reserves of approximately 10 billion cubic meters (BCM) could contribute to domestic energy supply, aligning with broader efforts to reduce import dependence.
The company’s valuation was carried out using both discounted cash flow (DCF) and market-based approaches. The share exchange ratio was designed to reflect the anticipated value from the combined operations. An independent valuation by ICON Valuation LLP, compliant with ICAI guidelines, was part of the process.
Revenue generation is expected to begin in April 2025, with operating margins projected to exceed 50 per cent. The natural gas market in India is forecasted to grow by 60 per cent by 2030, reaching 103 BCM annually, according to the International Energy Agency (IEA). Additionally, the government’s target to increase CBM production to 5 million metric standard cubic meters per day by 2027-28 may support sectoral momentum.
Operating under a public-private partnership model, Prabha Energy is among the limited number of such entities in India’s gas sector. With over three decades of experience in oil and gas services, the company brings a combination of technical know-how and execution capability to its operations. As commercial production nears and sectoral policies remain supportive, Prabha Energy is positioned to participate in India’s domestic energy expansion. The success of its CBM initiatives and broader operational strategies will be closely watched by market participants.
Prabha Energy Ltd’s recent restructuring, asset base, and market re-entry mark a significant phase in its evolution. With policy support, experienced partners, and upcoming production plans, the company’s progress in the coming quarters will be of interest to stakeholders tracking developments in India’s energy sector.
Disclaimer: The article is for informational purposes only and not investment advice.