Indraprastha Gas jumps by 18 per cent on Supreme Court Verdict

Shares of Indraprastha Gas (IGL) increased by 18 per cent and created a fresh 52 week high, on Wednesday's intraday trade. Its yesterday’s close was Rs 417.80 and it touched Rs 492 in NSE, today.

Today, after fighting for three years, Supreme Court rejected the plea of government regulator Petroleum and Natural Gas Regulatory Board (PNGRB) against the IGL and said that the regulator has no power to set retail gas rates. According to the reports, the decision removes uncertainties in the mind of investors and it is likely to move higher to touch Rs 550 in the next few quarters. Also, as per the media reports, IGL is looking to double the number of domestic customers of Piped Natural Gas (PNG) in the next four years, which  currently stands at 560000 PNG customers. It has added more than 100000 connections in 2014-15 and is aiming to add about 150000 new customers per year. The company also plans to add 10 Compressed Natural Gas (CNG) outlets every year, which currently stand at 300.

Earlier in April 2012, IGL tanked more than 40 per cent, when the PNGRB  ordered to cut tariff by 63 per cent. That was the first time the regulator has determined tariff for any City Gas Distribution player. The regulator asked IGL to reduce selling prices with immediate effect and return the excess tariff charged from April 2008, which was around Rs 1600 crores and 20 to 25 per cent of the then market capitalisation. IGL moved High Court against the order of PNGRB and in June 2012 Delhi High Court ruled in favour of IGL with the verdict that PNGRB does not have the authority to fix tariffs. PNGRB challenged the verdict of Delhi High Court and moved to the Supreme Court.

IGL was incorporated in 1998, by the strong promoters like GAIL India and Bharat Petroleum Corporation (BPCL). It was formed with the main objective, to provide safe, convenient and reliable natural gas supply in the National Capital Territory of Delhi, which includes the consumers in the domestic, transport, and commercial sectors. IGL took over Delhi City Gas Distribution Project in 1999 from GAIL (India). The transport sector uses natural gas like CNG, the domestic and commercial sectors use PNG and Re-gasified Liquefied Natural Gas (R-LNG) is being supplied to industrial establishments.