GAIL, Indraprastha Gas shares jump up to 7%; here’s why

Shares of state-run GAIL (India) Ltd rose as much as 7% on Monday after the Petroleum and Natural Gas Regulatory Board (PNGRB) received request from the industry committee which provided suggestions on various regulations pertaining to tariff determination.

The Petroleum and Natural Gas Regulatory Board has proposed to amend the Petroleum and Natural Gas Regulatory Board (Determination of Natural Gas Pipeline Tariff) Regulations, 2008 and is seeking comments on the proposed changes by April 11, 2025.

The gas regulator has asked stakeholders to submit the details of the gas being consumed, tentative impact in terms of value, etc. along with their comments.

Reacting to the developments, shares of GAIL jumped 6.7% in intraday trade to hit a high of ₹186.50 on the BSE, taking the state-owned company’s market cap to over ₹1.2 lakh crore.

Foreign brokerage Citi said fuel costs are a major change in the new draft regulations as the price of contractual LNG can now be claimed. This is likely to make GAIL a key beneficiary, as per Citi.

Citi stated that the recommendations also suggest more relaxed volume expectations once the 75% threshold is surpassed, positioning Gujarat State Petronet Ltd (GSPL) as a major beneficiary. Shares of Gujarat State Petronet increased 4.5% to hit a high of ₹302.05 on the BSE, taking the company’s market cap to over ₹16,600 crore.

Shares of Indraprastha Gas rose 6% in intraday trade to ₹210 on the BSE after foreign brokerage CLSA said it expects the new regulations to reduce the operating expenditure for both Indraprastha Gas and Mahanagar Gas. It also expects a hike in cost of gas users, including industrial customers of Gujarat Gas. The market cap of Indraprastha Gas jumped to around ₹28,700 crore.

Last week, the Petroleum and Natural Gas Regulatory Board said that certain state authorities have raised concerns regarding classification of PNG as Natural Gas due to odorization and pressure reduction. PNGRB clarified that the definition of natural gas as per the PNGRB Act, 2006 explicitly includes PNG, without any distinction arising from pressure regulation or odorization. “It is essential to highlight that these processes are standard safety and operational requirements as per PNGRB's regulations and do not alter the fundamental nature of natural gas. The continuous supply of PNG at varying pressures is necessary to maintain system integrity and cater to consumer requirements across different segments,” it said.