 "IGL shares to react to this price announcement; check here")
Investors will closely watch the shares of Indraprastha Gas Ltd on Thursday, March 7, after the company announced its decision to cut gas prices in Delhi.
Indraprastha Gas, on Wednesday, March 6, reduced the prices of compressed natural gas (CNG) in the national capital by Rs 2.5 per kilogram.
With this, the cost per kilogram of CNG in Delhi now stands at Rs 74.09.
"The revised selling price of CNG in Delhi shall be Rs 74.09 per kg, while it shall be Rs 78.70 per kg in Noida, Greater Noida, and Ghaziabad GA from 6 am tomorrow morning," IGL said in a statement.
The announcement comes soon after state-run Mahanagar Gas (MGL) also cut prices of compressed natural gas by Rs 2.5 per kg to Rs 73.50 per kg owing to a decline in input costs.
Incidentally, shares of MGL had crashed over 16 per cent intraday on Wednesday after global brokerage Citi downgraded the stock to 'Sell' from 'Buy'. As a rub-off effect, Indraprastha Gas had dropped over 6 per cent intraday yesterday, and Gujarat Gas fell 5 per cent.
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According to the brokerage, the government's continued push towards making CNG more affordable for citizens will adversely affect profit margins of gas companies, especially MGL.
Recently, Union Petroleum and Natural Gas Minister, Hardeep Puri, said at an event that current measures planned by the government will lead to a three-fold increase in natural gas consumption from 185 MMSCMD to 500 MMSCMD by 2030.
"Monopolies in the licensed areas have led to strong profits for gas firms in the past. But, there is a need to ensure reform enforcement to benefit the end consumer," he said.