The initiative of turning India into a carbon-neutral economy by 2070 is likely to hurt IGL (Indraprastha Gas Limited). Let’s find out how a rise in pollution led to its downfall.
IGL has grown from 9 CNG stations to 792 between 1999 and FY23. Further, it has 23.7 lakh residential and 9,000 commercial/industrial connections as of FY23.
The company started off in Delhi but has spread its presence in NCR, Rajasthan, Maharashtra and parts of Uttar Pradesh.
The company’s financials have shown strong growth, with shareholder wealth multiplying more than 18 times in the last two decades.
1. Ban on diesel generators 2. Mandate to use PNG for industrial activities 3. Delhi’s preference for CNG in DTC buses 4. The CGD policy provided exclusivity to IGL
It aims to convert its entire transport fleet to EVs in the next 25 years. There is a mandate asking all motor vehicle aggregators to go electric before 2030.
This can impact around 15 per cent of its total volumes. After all, Delhi constitutes around 60-65 per cent of the total CNG volumes of IGL (as of FY24)
IGL is gradually expanding operations in other regions. For instance, Gautam Budh Nagar and Ghaziabad are witnessing 11-12 per cent growth rates.
IGL’s financials may stay afloat by foraying into smart gas metre production to reap supply chain benefits and introducing electric charging stations at its pumps.
But the question remains how these policies will pan out. IGL's share price has suffered due to these uncertainties, down almost 24 per cent in the last three years.