IGL rallies on rumours of out-of-court settlement with PNGRB

MUMBAI: Shares of Indraprastha Gas (IGL) surged higher in trade today on rumours that the company is headed for an out-of-court settlement with Petroleum and Natural Gas Regulatory Board ( PNGRB) in tariff case.

However, the PNGRB sources have told ET Now that the oil & gas regulator has ruled out any such settlement with IGL.

According to PNGRB sources, there is no question of 'softening of stance' on IGL case. The Supreme Court will be final authority to decide on IGL case.

The Supreme Court is hearing a plea filed by PNGRB after the Delhi High Court ruled that the regulator cannot fix selling price for Indraprastha Gas. The apex court has deferred the case hearing to April 16, 2013.

Meanwhile, analysts said the rise in price could be on account of value-buying in the stock. IGL is available at 10x FY14 earnings against earlier multiples of 15-18x. If the Supreme Court verdict goes in favour of IGL, it will be positive for the stock. They are advising to approach the stock cautiously before the final verdict is out.

At 01:00 p.m.; the stock was at Rs 297.90, up 10.19 per cent, on the BSE. It touched a high of Rs 301.90 and a low of Rs 269.95 in trade today.