DTC bus volume erosion
DTC bus CNG volumes have fallen from 3.1 lakh kg/day to 1.5 lakh kg/day and are expected to go to zero in 2-3 years, impacting overall CNG sales.
IGL / bear-case history
Track the concerns that keep returning.
Indraprastha Gas · risk themes across the available quarters.
Research layer active
Bear-case history
Risks carried through the record.
high
LNG price spike risk
A sudden spike in LNG prices (e.g., geopolitical event) could compress margins despite current cushion.
EV policy impact on CNG demand
Delhi's EV policy may shift new vehicle additions to electric, though management believes CNG remains cost-competitive.
CBG blending cost uncertainty
CBG production volumes and purity remain uncertain, posing a risk to achieving blending targets on time.
Further APM gas allocation cuts
Reduced APM allocation could increase gas costs and pressure margins if price hikes are not implemented.
DTC bus electrification reducing CNG volumes
Transition of DTC buses to electric is expected to phase out remaining CNG buses in 2 years, impacting CNG volumes.
Henry Hub price volatility
Analyst raised concern about Henry Hub price increase; management noted current prices are lower but acknowledged risk.
Delhi EV policy uncertainty
Delhi government's EV policy draft not finalized; extension to March 2026 creates regulatory uncertainty for CNG demand.
APM gas allocation cut
A 20% reduction in APM gas allocation in October 2024 will increase input costs, requiring price hikes of INR 5-6/kg to maintain margins.
EV policy impact on CNG volumes
Delhi's mandatory EV norm for cab fleets could cap CNG growth, though management sees no near-term impact.
Gurugram area dispute
Disputed allocation of Gurugram GA remains sub judice, limiting expansion in a key growth area.
Gas sourcing cost uncertainty
Long-term gas sourcing contracts are still under evaluation; short-term RLNG and IGX purchases may be at higher costs.
INR depreciation could offset cost savings
Further rupee depreciation may erode the INR 1/SCM benefit from Gujarat VAT reduction, as RLNG costs are dollar-denominated.
DTC/DIMS transition to EVs continues to drag CNG volumes
The ongoing shift of DTC and DIMS buses to electric mobility reduces CNG sales, though the impact is diminishing.
Soft LPG prices causing fuel switching in industrial segment
Lower LPG prices (crude at $60-65) have led some industrial customers to switch from PNG to propane, impacting PNG growth.
Saudi JV execution and regulatory risks
The Saudi venture is at an early stage; tender details and regulatory approvals are pending, with no guarantee of winning bids.
Further APM gas supply cuts
Management acknowledged that future APM allocations depend on domestic production, which tends to decline over time, posing a risk to gas sourcing costs.
EV adoption impacting CNG demand
An analyst raised concerns about EV growth reducing CNG vehicle additions, especially in high-consumption segments like buses. Management countered that CNG is growing fastest among fuels.
Gurgaon GA legal dispute
The ongoing sub judice matter with APTEL regarding the remaining Gurgaon GA area remains unresolved, delaying expansion. Management declined to comment due to legal proceedings.
High RLNG spot prices during supply crunch
During the APM cut, IGL had to source expensive spot RLNG at $14-15/MMBtu, which was unsustainable and forced deliberate volume reduction.
DTC bus electrification drag on CNG volumes
DTC CNG consumption fell from 1.55 lakh kg/day in Q3 FY25 to 5,000 kg/day in Q3 FY26; expected to reach zero by March 2026. DIMS volumes also declining gradually.
Rupee depreciation increasing gas costs
INR devaluation of ~7-8% (from 86-87 to 90-91) added INR 2-2.5/SCM to gas costs, partially offsetting regulatory benefits. Further depreciation could pressure margins.
Regulatory hurdles for M&A in CGD sector
Management noted that high penalties on underperforming GAs deter M&A, limiting inorganic growth opportunities despite interest from larger players.
Delhi EV Policy 2.0 threat
The draft EV policy may ban new CNG two/three-wheelers in Delhi, impacting ~8% of CNG volumes. Management is lobbying for CNG to be treated as a transition fuel.
APM gas allocation cuts
APM allocation was cut by 0.8 MMSCMD, partially offset by new well gas. Further cuts could pressure margins if RLNG costs rise.
DTC bus electrification reducing CNG demand
Delhi Transport Department plans to replace all buses with EVs, reducing DTC CNG volumes from 1.1 lakh kg/day to zero over time.
New GA profitability timeline
Kanpur and Ajmer GAs are still EBITDA-negative, though expected to turn positive in Q1 FY26. Delays could impact overall margins.