A leak and the fall in gas stocks?

The fall in the stock price of Indraprastha Gas before the concept paper released by Petroleum and Natural Gas Regulatory Board (PNGRB) on Friday has raised eyebrows. The concept paper recommended that private players should be allowed to use the infrastructure of city gas distributors such as Indraprastha Gas and Mahanagar Gas. The proposal, if cleared, could be adverse for these companies.

Indraprastha shares fell 7 per cent in the week before the concept paper was put out on Friday evening, sparking speculation that some in the market had a whiff of the proposal. The stock fall was driven by higher volumes.

Average daily traded volumes in Indraprastha Gas between June 7 and 20 was roughly 13.8 lakh shares. This spiked to 25.65 lakh shares every day between June 21 and July 1. The stock fell 3.5 per cent to Rs 304.85 on Monday.