IGL-MGL Share Crash: In Friday’s trading session, shares of City Gas Distribution Company Indraprastha Gas Limited and Mahanagar Gas Limited closed down. A decline of up to 15 percent was seen in the shares of these companies during the day’s trade. At the close of the market, the shares of Indraprastha Gas Limited fell by 10.25 percent and closed at Rs 452.70 and the shares of Mahanagar Gas Limited fell by 9.78 percent and closed at Rs 1588.40.
Why did IGL and MGL fall?
The government has announced that city gas distribution companies will reduce the allocation of gas on priority basis. According to the policy guidelines of the Ministry of Petroleum and Natural Gas, there is a provision to allocate domestic natural gas on APM to the priority segments of city gas distribution which include CNG and domestic PNG. According to the policy document, gas will be allotted to city gas distribution companies as per the availability for this segment with Gas India.
Gas allocation reduced by 21 percent
In a regulatory filing with the stock exchange, Mahanagar Gas Limited said, with effect from October 16, 2024, the allocation of gas for CNG (Transport) has been reduced by 20 per cent as compared to the earlier APM allocation. The company said that this is a big cut and it can also affect the company’s profits. Indraprastha Gas Limited said in a filing with the exchanges, as per the information received by the company from GAIL India Limited, the nodal agency for domestic gas allocation, there has been a major reduction in the domestic gas allocation from October 16. The allocation has been reduced by 21 percent compared to earlier. IGL also said that this may affect profits.
IGL and MGL stocks beaten
Due to this news, the shares of Indraprastha Gas Limited fell by 13 percent from the previous closing to Rs 439.35. While the stock of Mahanagar Gas Limited fell by 14.70 percent to Rs 1503, the stock closed at Rs 1582.
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