Indraprastha Gas surges as SC rejects PNGRB's plea

MUMBAI: Shares of Indraprastha Gas (IGL) surged as much as 16.4 per cent intraday trade after the Supreme Court rejected Petroleum and Natural Gas Regulatory Board’s (PNGRB) plea against the company.

IGL was fighting a case against PNGRB for past three years after the latter directed it to cut network tariff by 63 per cent in 2012 and refund the difference to customers retrospectively from April 1, 2008 till the date of the order.

The Apex Court in its ruling upheld Delhi High Court verdict and said the regulator has no power to ser retail gas rates.

IGL, which traded at an average P/E multiple of 20 times, touched a multiple of 9.74 after the order. It's currently trading at 12.65 times as against the average of 14.26 of past eight years.

The verdict removes uncertainties in the mind of investors, said Rajesh Vedvyas, Former MD of IGL. Gas distribution pricing should take place by competition not by regulators: SC Tripathi, Former Oil Secretary said.

According to analysts, it’s a shot in the arm for IGL. People were waiting for the stock to get its due.

“The stock was subdued after it got entangled in the case. It is likely to move higher and touch Rs 540-550 zone in next few quarters,” said Prakash Diwan, Director - Altamount Capital Management.