Shares of major gas distribution companies, including Indraprastha Gas (IGL), Mahanagar Gas (MGL) and Adani Total Gas, surged up to 4% in Wednesday’s trading session, despite weak sentiments on Dalal Street
The rally in the stocks came in after the government cleared an incentive scheme to boost domestic piped natural gas (PNG) connections.
IGL share price gained the most, surged as much as 4.30% on NSE. Meanwhile, MGL share price rallied 3.74%. Adani Total Gas share price also rose 2.36% on 19 August.
On the other hand, Indian benchmark indices opened on a subdued note as rising commodity prices weighed on market sentiment. The Sensex began marginally lower at 77,218.05, compared with its previous close of 77,235.46, while the Nifty slipped below the 24,200 mark. Investor sentiment was also dampened by mixed signals from Tehran and Washington regarding the Strait of Hormuz.
What’s behind the rally?
The government has unveiled an incentive programme to speed up the expansion of PNG connections for households, with the aim of making cleaner and more affordable cooking fuel accessible to more consumers across India.
Under the APM/NAPM Incentive Scheme for the Promotion of Domestic PNG Connections, eligible city gas distribution (CGD) companies will be provided an additional 200 standard cubic metres (SCM) of domestically produced and relatively cheaper APM gas for every incremental billed household PNG connection above the prescribed threshold for each geographical area.
According to an official statement, the scheme will be implemented in two phases, with each tranche lasting six months. The scheme will into effect from September 1, 2026.
The additional allocation of lower-cost APM gas is expected to enable CGD companies to substitute a larger portion of the expensive liquefied natural gas (LNG) used in their compressed natural gas (CNG) transportation business, thereby lowering their overall gas sourcing costs.
The government believes these savings could substantially improve the financial viability of expanding household PNG networks. The capital expenditure payback period for new domestic PNG connections is expected to decline to around three years from nearly 10 years, creating a stronger financial incentive for CGD companies to expand their networks and add more households.
In addition, the government is developing a unified PNG registration portal that will serve as a single-window digital platform for consumers to apply for new connections and monitor the status of their applications.
These initiatives form part of the government’s wider push to expand the reach of piped cooking gas and accelerate the transition towards cleaner, safer and more affordable fuel.
Since the onset of the war, gas suppliers such as Indraprastha Gas, Mahanagar Gas, GAIL Gas and Bharat Petroleum Corp have introduced incentives, including discounts on installation charges for new piped natural gas (PNG) connections.
The country relies on imports to meet nearly 60% of its LPG requirement. In 2025, India imported around 22 million metric tonnes of LPG, largely from the Middle East, at a cost of nearly $12 billion.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
