Government of India has cut the allocation of lower-priced domestic gas to city gas distribution (CGD) companies. As a result, these companies will now have to depend more heavily on costlier gas supplies for their domestic and transport gas segments, which is likely to impact their profit margins. This policy shift triggered a decline in CGD companies, with prices falling by more than 6 percent during Wednesday’s trading session.
Here are the three city gas distribution companies that saw a drop of over 6 percent following the changes in domestic gas allocations:
Adani Total Gas Limited
With a market cap of Rs. 66,654 crores, the stock moved down by around 1.5 percent on BSE to hit an intraday low at Rs. 602.2 on Wednesday.
According to the latest regulatory filings, Adani Total Gas Limited has been informed by the Nodal Agency (GAIL (India) Ltd) of a 15 percent reduction in APM gas allocation, effective 16th April 2025. This reduced allocation of APM gas is being replaced with New Well Gas (NWG).
However, due to the higher cost of NWG and the lower APM gas allocation, the company expects a negative impact on its profitability. Adani Total Gas is currently evaluating various steps to mitigate this impact.
In Q3 FY25, the company’s revenue from operations increased by around 12 percent YoY to Rs. 1,294 crores, while the net profit grew by nearly 20 percent YoY to Rs. 142 crores.
Indraprastha Gas Limited
With a market cap of Rs. 24,542 crores, the shares of IGL moved down by around 4 percent on BSE to hit an intraday low at Rs. 172 on Wednesday.
As per the latest regulatory filings, IGL informed that there has been a reduction in domestic gas allocation to the company, effective 16th April 2025. The revised allocation is ~20 percent lower than its previous allocation.
However, to compensate for this cut, the company has been allocated an additional ~125 percent of the reduction in domestic gas volumes as New Well Gas (NWG), which is priced at 12 percent of the Indian Crude Basket (ICB), also effective from 16th April, 2025. IGL further stated that the above revision in allocations is expected to impact its profitability.
In Q3 FY25, the company’s revenue from operations increased by around 6 percent YoY to Rs. 3,759 crores, while the net profit declined by nearly 31.6 percent YoY to Rs. 325 crores.
Mahanagar Gas Limited
With a market cap of Rs. 12,430.7 crores, the shares of MGL moved down by around 6.5 percent on BSE to hit an intraday low at Rs. 1,231 on Wednesday.
According to the latest regulatory filings, Mahanagar Gas Limited (MGL) announced that its allocation of APM natural gas has been reduced by 18 percent, effective 16th April 2025, compared to the previous fortnight APM allocation. This change comes under the revised guidelines issued by the Ministry of Petroleum and Natural Gas.
The company stated that the reduced APM volume has been replaced with New Well/Well Intervention Gas (NWG). While this shift is expected to negatively impact profitability, MGL is actively exploring various measures to mitigate the financial impact.
In Q3 FY25, the company’s revenue from operations increased by around 18 percent YoY to Rs. 1,847 crores, while the net profit fell by nearly 30.3 percent YoY to Rs. 221 crores.
Written by Shivani Singh
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