Indraprastha Gas Bonus Issue: The natural gas giant, Indraprastha Gas, turned ex-date on Friday, January 31 for its first-ever bonus issue in the ratio of 1:1. This is also its record date. On the ex-date, IGL's share price traded higher by nearly 2% to hit an intraday high of Rs 201.30. IGL's stock price is adjusted to the bonus issue ratio. Notably, IGL has revised its allotment date for bonus shares. However, brokerage Antique Stock Broking has recommended selling on the stock.
Indraprastha Gas Share Price:
At the time of writing, IGL's share price traded near its day's high to Rs 200.80 apiece on BSE, up by 1.5% with a market cap of Rs 28,112.03 crore. Adjusted to the bonus issue, IGL's new 52-week high and low are at Rs 285.30 and Rs 153.25 apiece respectively.
The price-to-equity ratio of IGL is at 9.36x, while the return on equity is at 16%.
Indraprastha Gas Bonus Issue:
IGL turned ex-date on January 31 for its first-ever bonus issue in the ratio of 1:1, meaning, the company will issue 1 (one) Bonus Equity Share of the face value of Rs 2/- each fully paid up for every 1 (one) existing equity shares of the face value of Rs 2/- each fully paid up, to the eligible shareholders. This is also the record date.
However, IGL has revised its allotment date for the bonus. In its regulatory filing this week, IGL said, "This is to inform you that the Bonus Issue Committee has fixed Friday, January 31, 2025, as the "Record Date" to determine the eligibility of shareholders for the issuance of Bonus Shares. Initially, the deemed date of allotment was fixed for Monday, February 03, 2025 (being the next working date of the record date) but due to Saturday, February 01, 2025, being declared as a Working/Trading Day on account of Union Budget 2025-26, the Bonus Issue Committee has revised the Deemed date of allotment to Saturday, February 01, 2025."
BUY/SELL IGL Share Price?
In its note, Antique Stock Broking highlighted that "Indraprastha Gas (IGL) reported weak 3QFY25 performance, with EBITDA at INR 3.6 bn (-32% QoQ, -36% YoY) due to higher gas costs, following a cut in APM gas allocation for the priority segment in October and November (though the November cut was later reversed). EBITDA margin sharply declined to INR 4.34/scm (-33% QoQ, -40% YoY), below our estimate of INR 4.94/scm, driven by higher-than-expected gas costs. PAT stood at INR 2.9 bn (-34% QoQ, -27% YoY)."
Further, Antique's note said, "While IGL has guided for 9.5 mmscmd exit volume in FY25 and aggressive 10%-11% annual growth in FY26/ 27 (adding 1 mmscmd each year), we foresee modest volume growth of 7%-8%. Margins remain under pressure, as the structural decline in APM gas allocation poses a key concern unless the government revises its policy. Additionally, lower liquid fuel prices could further cap margins. While IGL targets an EBITDA margin of INR 7-8/scm, we expect it to moderate to INR 6-6.5/scm."
On the valuation, Antique said, "We have cut our FY25 EPS estimate by 16% to reflect 9M average EBITDA margin and volume, while FY26/ 27E EPS is marginally reduced by 4% each on 2% cut in margin and volume. We maintain SELL rating with a revised TP of INR 335 (earlier INR 350), based on a target P/E multiple of 12.5x FY27E."
About Indraprastha Gas:
Incorporated in 1998, IGL took over Delhi City Gas Distribution Project in 1999 from GAIL (India) Limited (Formerly Gas Authority of India Limited). IGL continues to augment its infrastructure so as to meet the increasing demand of CNG arising out of growing number of CNG vehicles in Delhi. The growth drivers for increase in demand of CNG are - car manufacturers coming up with CNG variants and Delhi Government's directive making it mandatory for all LCVs operating in Delhi to run on CNG. The company is in the process of enhancing its compression capacity by adding new stations.
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