MUMBAI, Sept. 22 -- GAIL Gas Ltd has begun the process of appointing investment banks for an initial public offering (IPO) that could raise up to Rs.3,100 crore, according to a document reviewed by Mint. The city gas distribution company, a wholly owned subsidiary of state-run GAIL (India) Ltd, is seeking up to four book-running lead managers to manage the proposed share sale. "The company is planning on conducting a pre-bid meeting with all interested merchant bankers this week to address their queries, with bids expected to start coming in by early next month," a person aware of the developments told Mint. The appointed advisers will draft and file the draft red herring prospectus and final prospectus with the Securities and Exchange Board of India (Sebi) and stock exchanges, according to the scope of work in the document. They will also oversee the appointment and work of transaction intermediaries, including domestic and international legal counsel and registrars. The IPO is part of India's Asset Monetisation Pipeline 2.0, under which government-owned companies will divest stakes in their subsidiaries between fiscal year 2027 (FY27) and FY30. The proceeds from these stake sales will be retained by the companies as monetized value. NITI Aayog's February report had projected the GAIL Gas IPO for FY28. An email sent to GAIL Gas did not immediately elicit a response. Incorporated in 2008, GAIL Gas is a wholly owned subsidiary of GAIL and was set up to implement city gas distribution projects in the country. It currently operates CGD projects in 16 geographical areas across nine states, including Madhya Pradesh, Haryana, Rajasthan, Chhattisgarh and Karnataka. It is also pursuing city gas business in Andhra Pradesh, Goa and Assam. The company plans to acquire six geographical areas from its parent for a proposed consideration of around Rs.1,500 crore. GAIL Gas expects the areas to have strong growth potential and to contribute to its scale of operations. "However, amid the ongoing Middle East (West Asia) conflict and the resultant reduction in LNG shipments, gas supplies to industrial customers have curtailed, which may impact industrial customers volumes in the near term," credit rating agency India Ratings said in April 26 note about the company....