Gas Supply Cuts Hit Indraprastha and Mahanagar Shares

Shares of Indraprastha Gas Ltd and Mahanagar Gas Ltd fell over 10% after domestic gas supplies were slashed. The reduction increased dependency on costly imported fuel, affecting profitability as allocation for CNG volumes was cut by up to 21%. Both firms anticipate adverse impacts.

Shares of Indraprastha Gas Ltd and Mahanagar Gas Ltd plunged over 10% on Friday. The sharp drop came after a government decision to cut supplies of domestically produced gas available at half the price of imports, intensifying the companies' reliance on expensive imported fuel.

Indraprastha Gas shares closed down 10.25% at Rs 452.70 on the BSE, sinking as low as Rs 439.40 during the day. Meanwhile, Mahanagar Gas shares fell 10.09% to Rs 1,582.95, touching an intra-day low of Rs 1,503.80.

The government has reduced cheaper domestic gas supplies to city gas distributors that offer CNG for vehicles, affecting their bottom line. Indraprastha Gas reported a 21% reduction in allocation, while Mahanagar Gas faced a 20% decrease, both citing adverse impacts on profitability.

(With inputs from agencies.)