Indraprastha Gas Ltd. signage is diaplayed at a gas station in New Delhi, India.(Photographer: Prashanth Vishwanathan/Bloomberg)

Indraprastha Gas To Take Over Haryana City Gas Distribution’s Gurugram Operations

Indraprastha Gas Ltd. has agreed to take over the supply of natural gas in Gurugram district from Haryana City Gas Distribution Ltd., resolving a long-pending dispute amicably.

The two companies have also agreed to the Additional Solicitor General’s suggestion to appoint Deloitte Haskins and Sells LLP as an independent valuer of the business, according to a Supreme Court order uploaded on the stock exchanges by Indraprastha Gas.

Deloitte Haskins will have to submit the report within four weeks or by Nov. 30. The apex court will hear the case next on Dec. 6.

The acquisition of an established city gas distribution network will be positive for Indraprastha Gas, Probal Sen the lead oil and gas analyst at IDFC Securities, said in a note. “With the relatively low penetration achieved by Haryana City Gas Distribution and the potential for growth in both residential and commercial units in the district, we see Indraprastha Gas’ volume visibility extending comfortably till the financial year 2024-25 via this move,” said Sen.

Shares of Indraprastha Gas rose as much as 6.4 percent, extending gains for the fifth straight session, to Rs 297.05 apiece. The stock gained 13.5 percent this week, its best performance since Jan. 11, 2016.

Why Gurugram Matters

The dispute started when the Petroleum and Natural Regulatory Board permitted Haryana City Gas Distribution to operate in Gurugram. Indraprastha Gas challenged the decision, saying it was authorised by the central government in 2004, much before the regulator came into existence.

In 2017, Indraprastha Gas received the permission from the Haryana government to lay a city gas distribution network in Gurugram in the area between the western side of Sohna Road and National Highway-8.

At its peak potential, Gurugram can generate demand for 1.25 million metric standard cubic meters of natural gas a day, brokerage firm Motilal Oswal had earlier said in a note. Indraprastha Gas had clocked 6 million metric standard cubic metres per day in the quarter-ended June.

Indraprastha Gas, which sells compressed and piped natural gas in the national capital and adjoining cities of Ghaziabad, Noida, Greater Noida and Rewari, had cash and cash equivalents of Rs 1,448 crore as on March 31. It had no debt on its books.

Here’s what the brokerages have to say about Indraprastha Gas:

IDFC Securities

  • Maintains ‘Outperformer’ with a target price of Rs 345, implying a potential upside 24 percent.
  • Acquisition of an established city gas distribution will be a positive.
  • Material growth opens up for Indraprastha Gas.
  • Acquisition can cost Rs 1,100-1,160 crore, which is manageable.


  • Maintains ‘Buy’ with a target price of Rs 425 apiece.
  • Gurugram can boost volume outlook.
  • Gurugra’s gas demand potential can be 25 percet of Indraprastha Gas’s entire Delhi-NCR volumes.
  • Valuation shouldn’t be expensive.


  • Maintains ‘Buy’ with a target price of Rs 320 apiece.
  • The move is a positive as it will address growth concerns.
  • Can lead to good use of cash.
  • Indraprastha Gas offers steady volume growth, sustained pricing power, and high earnings visibility.