Shares of gas producers fell on the bourses today led by Reliance Industries, which closed lower by 2.87 per cent after the Election Commission asked the government to defer the gas price hike until after the general elections.
During the day, shares of Reliance Industries fell as much as 3.53 per cent to an intra-day low of Rs 872.60 on the BSE and the scrip of ONGC declined 4.54 per cent to an intra-day low of Rs 306.60 on the BSE.
At the end of today's trading session, Reliance Industries was quoted at Rs 878.65, down 2.87 per cent, while ONGC ended the day at Rs 320.10, down 0.34 per cent.
Meanwhile, the shares of Oil India settled at Rs 471.70, down 2.75 per cent. It had touched an intra-day low of Rs 468.60 during the day.
According to global brokerage firm Barclays, the impact of the delay in new gas price on Reliance Industries is "less significant", but could cut 6 per cent from ONGC and Oil India's FY15 EPS.
"Assuming the new government does not scrap the decision altogether (unlikely, in our view) this could defer upside for gas producers by one quarter, cutting FY15E gas realisations by USD 0.9/mmbtu or 10.5 per cent," Barclays said in a research note.
Natural gas prices in India were set to nearly double from 1 April.
On March 24, the EC asked the government to defer the hike until the general elections, scheduled for April 7 to May 12, are over. The results are due on May 16 post which a new government would come to power.
Market analysts attributed the fall to the EC decision, which means the gas price hike may now be delayed as the new government could review the entire decision and take an independent view.
Though the decision to revise gas prices from April 1, 2014 was first taken in June 2013 and notified on January 10 this year, the Oil Ministry had approached Election Commission for permission to announce the new price.
