IGL Expects Rs 150 Crore Annual Revenue From Gurgaon City Gas Services
Indraprastha Gas Ltd (IGL) is expecting a revenue of Rs 150 crore annually from its planned city gas services in Gurgaon for which it has just received license from the Haryana government, its managing director has said.
The state government has permitted IGL to operate in an area that is about a quarter of Gurgaon and houses 10-15% of the satellite city’s population, and given it a target to set up 10 compressed natural gas (CNG) stations for fueling vehicles and connect 10,000 homes with piped gas.
“Gurgaon is an evolved market and it has huge demand for gas. We will have plenty of customers to serve from day one,” said E. S. Ranganathan, Managing Director of IGL.
IGL, a joint venture of Bharat Petroleum and GAIL, reported a revenue of Rs 1,161 crore and a profit of Rs 161 crore in the April-June quarter. Its shares, valued at Rs 18,000 crore, have risen 90% in a year.
IGL plans to set up all 10 CNG stations and other related infrastructure in a year after it receives the regulatory clearances, Ranganathan said, adding that it would require an investment of Rs 200 crore in the first year, which will be funded by internal resources. Subsequent investments will be made as consumer base expands.
“We can easily meet the government-set target for Gurgaon. In Noida, which is a fifth less populated than Gurgaon, we have built 35 CNG stations, and given away more than one lakh consumer connections since we started operating in 2008,” Ranganathan said.
The rest of the Gurgaon will continue to be served by Haryana City Gas Distribution (HCG), another private city gas operator, which had received license from Haryana government to operate gas network in the city in 2005. Just a year earlier, in 2004, IGL had received the mandate for Gurgaon from the Central government. This had resulted in a legal dispute that is yet to be finally settled. But the state government last month permitted IGL to roll out services in a part of Gurgaon and promised land for CNG stations.
As of March 2017, Haryana City Gas operated 16 CNG stations and serviced 15,000 piped gas consumers in Gurgaon.
That IGL has license to operate in Delhi and satellites Noida, Ghaziabad and Rewari in Haryana would be an advantage in executing project in Gurgaon, Ranganathan said. “We can use the same set of vendors and contractors for materials and men operating in Delhi or Rewari to quickly build infrastructure in Gurgaon. This will save us time and cost,” said Ranganathan.
Once the service is in place, vehicles from the part of Gurgaon that’s not covered by IGL could also land at their CNG stations to avoid longer queues at existing pumps.
“Customers just need convenience,” Ranganathan said, adding that the company would offer households the facility of equated monthly installments (EMI) to pay the initial cost of Rs 6,000 to encourage them to switch to piped gas from using cooking gas cylinders that can be obtained cheaply but match piped gas in recurring expense. IGL has got about 30,000 new subscribers availing the EMI payment scheme in the past 8 months.