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    Default Indraprastha Gas, GAIL shares slump on fears of tariff cuts

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    Indraprastha Gas shares nosedived on Tuesday by up to 46 per cent in the morning trade amid reports that Petroleum and Natural Gas Regulatory Board (PNGRB) has directed the company to cut CNG tariffs in Delhi.

    IGL currently charges a network tariff of Rs 104.05 per mBtu (million British thermal Units). In addition, it also levies compression charges at Rs 6.66 per kg for compressed natural gas (CNG).

    Following the report, shares of the company fell sharply by 45.85 per cent to a 52-week low of Rs 187.70 at the National Stock Exchange (NSE).

    Declines were seen in other gas-related stocks on similar concerns over the Board's reported directive.

    Among other gas utilities, GAIL India was down 3.08 per cent, Gujarat Gas plunged 7.09 per cent, Petronet LNG declined 3.94 per cent and Gujarat State Petronet slide 7.76 per cent

    "Revision in prices has battered the stock. Profitability of IGL may decline by 40 per cent with similar impact on the stock price and a cut in earnings per share," Kishor Ostwal CMD CNI Research said.

    Reports suggest IGL's tariff is very high compared to the extant PNGRB notified rates.

    PNGRB has directed Indraprastha Gas to reduce its selling prices and refund the difference in the two tariffs with immediate effect, reports said.



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