IGL will make gas meters, lines up Rs 1,100cr war chest

Indraprastha Gas Ltd (IGL), the country’s largest CNG and PNG service provider by sales and number of vehicles serviced, will soon start manufacturing household gas meters to reduce dependence on imports from China and secure a piece of the Rs 4,390 crore market for such ancillaries expected to open up as the government expands city gas service to 407 districts.

IGL managing director E S Ranganathan said the company was ready with a Rs 1,100 crore investment plan for expanding CNG stations and pipeline network to meet an expected double-digit growth in city gas demand in 2020-21. The company will have per cent per cent9 CNG stations by the end of the month and plans to add another 60 in 2020-21. IGL took piped gas to 2.8-3 lakh homes in the current fiscal and will maintain the same pace in 2020-21.

Ranganathan said the gas meter manufacturing foray was prompted by the fact that supplies will be vulnerable as majority of these are imported — mostly from China — as demand rises on the back of expanding city gas networks. “There is space and need for domestic manufacturing to reduce reliance on imports and promote ‘Make in India’. We will also supply meters to other operators after meeting IGL’s needs,” Ranganathan said.

IGL will invest Rs 100 crore to set up the factory to manufacture 10 lakh mechanical and smart meters a year and partnership talks are at an advanced stage, he said. Analysts saw the manufacturing foray as part of IGL’s preparation for life after it loses the monopoly over Delhi, the country’s largest CNG and PNG market, as per the regulatory norms. “The backward integration is smart planning. The timing is also right as demand will rise as city gas networks start rolling out in the next few years. It will give IGL a competitive edge as it expands to newer cities,” an analyst said.

A brainstorming session with states organised by the oil ministry to promote the use of natural gas pegged the market for mechanical meters at Rs 1,8 per cent0 crore and smart meters at Rs 2, per cent40 crore.

ET Energy World
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