Company overview—
Incorporated in 1998, a joint venture between Gail & BPCL. Government of national capital territory of Delhi is also a shareholder. Company started its operation with 9 CNG stations & 1000 PNG consumers and Crossed 156 stations as of now. Company Completed 12” steel pipeline laying project in December 2002. Company is sole distributor of CNG in NCTD to the automotive sector & also distributes piped natural gas (PNG) to the commercial & the domestic sector in NCTD. Supreme Court order to public transport vehicles to compulsory shift to clean CNG in NCTD has helped company to grow its sales aggressively.
At starting company was started to lay the network for the distribution of natural gas in the National Capital Territory of Delhi to consumers in the domestic, transport, and commercial sectors. With the backing of strong promoters i.e. GAIL (India) Ltd. and Bharat Petroleum Corporation Ltd., company plans to provide natural gas in the entire capital region. Main business objectives of the company are— to provide safe, convenient and reliable natural gas supply to its customers in the domestic and commercial sectors and provide a cleaner, environment-friendly alternative as auto fuel to Delhi’s residents. This will considerably bring down the alarmingly high levels of pollution. The transport sector uses natural gas as Compressed Natural Gas (CNG), while the domestic and commercial sectors use it as Piped Natural Gas (PNG). IGL now focuses on conversion of private vehicles to CNG. In this connection efforts are being made on the private vehicle front encouraging them to convert to CNG mode. Company is coordinating with CNG kit suppliers, Transport Department, Automotive Research Association of India and Vehicle research and Development Establishment to ease the process for endorsement of the same on Registration certificate of the vehicle.
Products & services—
Company is sole distributor of CNG in NCTD to the automotive sector & also distributes piped natural gas (PNG) to the commercial & the domestic sector in NCTD. CNG contributes almost 95% and PNG contributes around 5% of company’s sales. With over 156 dispensing stations company caters over 1,00,000 vehicles.
1) CNG stands for compressed natural gas. It is gaseous fuel and is a mixture of hydrocarbons mainly Methane. For use in Automobiles as fuel, it is compressed to a pressure of 200-250 Kg/cm2 to enhance the vehicle on-board storage capacity. The advantages of using CNG are various and distinct. The most important benefit of using CNG is that you are using a “green fuel’.
Green fuel - Commonly referred to as the green fuel because of its lead and sulphur free character, CNG reduces harmful emissions. Being non-corrosive, it enhances the longevity of spark plugs. Due to the absence of any lead or benzene content in CNG, the lead fouling of spark plugs, and lead or benzene pollution are eliminated.
Increased life of oils - Another practical advantage observed is the increased life of lubricating oils, as CNG does not contaminate and dilute the crankcase oil.
Mixes evenly in air - Being a gaseous fuel CNG mixes in the air easily and evenly.
Safety - CNG is less likely to auto-ignite on hot surfaces, since it has a high auto-ignition temperature (540 degrees entigrade) and a narrow range (5%-15%) of inflammability. It means that if CNG concentration in the air is below 5% or above 15%, it will not burn. This high ignition temperature and limited flammability range makes accidental ignition or combustion very unlikely.
Low operational cost - The operational cost of vehicles running on CNG, as compared to those running on other fuels, is significantly low. At the prevailing price of fuel in Delhi, operational cost of CNG vehicles is almost 68% lower than petrol and 36% lower than diesel.
2) PNG— Natural gas is mainly methane i.e. CH4 with a small percentage of other higher hydrocarbons. The ratio of carbon to hydrogen is least in methane and hence it burns almost completely making it the cleanest fuel. It is procured from the oil / gas wells and transported through a network of pipelines across the country. PNG has several distinctions to its credit of being a pollution free fuel, easily accessible minus storage troubles and being available at very competitive rates.
Uninterrupted supply--The source of PNG supply in Delhi is the famous Hazira-Bijaipur-Jagdishpur (HBJ) pipeline of GAIL (India) Limited. PNG offers the convenience of ensuring continuous and adequate supply of PNG at all times, without any problems of storing gas in cylinders.
Unmatched convenience--PNG eliminates the tedious routine of checking LPG refill cylinder for any suspected leakage, or it being underweight, at the time of delivery. Moreover, the user is spared the inconvenience of connecting and disconnecting the LPG cylinder when out of gas. Precious space, occupied by LPG cylinders is also saved.
Safety --The combustible mixture of natural gas and air does not ignite if the mixture is leaner than 5% and richer than 15% of the air-fuel ratio required for ignition. This narrow inflammability range makes PNG one of the safest fuels in the world.
Economy with PNG --PNG has been positioned to be cheaper than alternative fuels being used viz domestic LPG in case of House Hold, commercial LPG in case of Small Commercial and LPG Bulk & LDO in case of Large Commercial.
A versatile fuel --Natural gas is being used predominantly as a versatile fuel in many major cities catering to domestic and commercial applications, as a cooking fuel, for water heating, space heating, air conditioning, etc.
Environment friendly –Natural gas is one of the cleanest burning fossil fuels, and helps improve the quality of air, especially when used in place of other more polluting energy sources. Its combustion results in virtually no atmospheric emissions of sulphur dioxide, and far lower emissions of carbon monoxide, reactive hydrocarbons and carbon dioxide, than combustion of other fossil fuels. When natural gas burns completely, it gives out carbon dioxide and water vapour only.
No storage problems and stock accounting--PNG does not require any storage tank or storage space since it is supplied to you through pipelines. Also, the manpower and time that was earlier being used for ensuring minimum stock levels of LPG, HSD and LDO, can be used elsewhere. The other functions that accompany storing these fuels – monitoring stock levels, checking the quality and quantity of fuels received have also been rendered unnecessary.
Economy with PNG--PNG has been presently positioned to be cheaper than alternative fuels. For small commercials the pricing is indexed to 19 Kg LPG cylinders after adjusting for heat values. For Large Commercials, pricing is indexed to 90% LDO and 10% Bulk LPG again after adjusting for heat values.
No daily contact--The consumer is spared the task of contact with oil companies and co-ordinating with them for ensuring the daily supply of fuel, because PNG is supplied directly through pipes.
No spillage and pilferage--In case of spillage of fuels like HSD and LDO, there are liable to be immense product losses.
Lower maintenance cost --With PNG, soot or ash accumulation and greasy spillages are absent from your appliance. Maintenance costs are, thus, driven down.
Incorporated in 1998, a joint venture between Gail & BPCL. Government of national capital territory of Delhi is also a shareholder. Company started its operation with 9 CNG stations & 1000 PNG consumers and Crossed 156 stations as of now. Company Completed 12” steel pipeline laying project in December 2002. Company is sole distributor of CNG in NCTD to the automotive sector & also distributes piped natural gas (PNG) to the commercial & the domestic sector in NCTD. Supreme Court order to public transport vehicles to compulsory shift to clean CNG in NCTD has helped company to grow its sales aggressively.
At starting company was started to lay the network for the distribution of natural gas in the National Capital Territory of Delhi to consumers in the domestic, transport, and commercial sectors. With the backing of strong promoters i.e. GAIL (India) Ltd. and Bharat Petroleum Corporation Ltd., company plans to provide natural gas in the entire capital region. Main business objectives of the company are— to provide safe, convenient and reliable natural gas supply to its customers in the domestic and commercial sectors and provide a cleaner, environment-friendly alternative as auto fuel to Delhi’s residents. This will considerably bring down the alarmingly high levels of pollution. The transport sector uses natural gas as Compressed Natural Gas (CNG), while the domestic and commercial sectors use it as Piped Natural Gas (PNG). IGL now focuses on conversion of private vehicles to CNG. In this connection efforts are being made on the private vehicle front encouraging them to convert to CNG mode. Company is coordinating with CNG kit suppliers, Transport Department, Automotive Research Association of India and Vehicle research and Development Establishment to ease the process for endorsement of the same on Registration certificate of the vehicle.
Products & services—
Company is sole distributor of CNG in NCTD to the automotive sector & also distributes piped natural gas (PNG) to the commercial & the domestic sector in NCTD. CNG contributes almost 95% and PNG contributes around 5% of company’s sales. With over 156 dispensing stations company caters over 1,00,000 vehicles.
1) CNG stands for compressed natural gas. It is gaseous fuel and is a mixture of hydrocarbons mainly Methane. For use in Automobiles as fuel, it is compressed to a pressure of 200-250 Kg/cm2 to enhance the vehicle on-board storage capacity. The advantages of using CNG are various and distinct. The most important benefit of using CNG is that you are using a “green fuel’.
Green fuel - Commonly referred to as the green fuel because of its lead and sulphur free character, CNG reduces harmful emissions. Being non-corrosive, it enhances the longevity of spark plugs. Due to the absence of any lead or benzene content in CNG, the lead fouling of spark plugs, and lead or benzene pollution are eliminated.
Increased life of oils - Another practical advantage observed is the increased life of lubricating oils, as CNG does not contaminate and dilute the crankcase oil.
Mixes evenly in air - Being a gaseous fuel CNG mixes in the air easily and evenly.
Safety - CNG is less likely to auto-ignite on hot surfaces, since it has a high auto-ignition temperature (540 degrees entigrade) and a narrow range (5%-15%) of inflammability. It means that if CNG concentration in the air is below 5% or above 15%, it will not burn. This high ignition temperature and limited flammability range makes accidental ignition or combustion very unlikely.
Low operational cost - The operational cost of vehicles running on CNG, as compared to those running on other fuels, is significantly low. At the prevailing price of fuel in Delhi, operational cost of CNG vehicles is almost 68% lower than petrol and 36% lower than diesel.
2) PNG— Natural gas is mainly methane i.e. CH4 with a small percentage of other higher hydrocarbons. The ratio of carbon to hydrogen is least in methane and hence it burns almost completely making it the cleanest fuel. It is procured from the oil / gas wells and transported through a network of pipelines across the country. PNG has several distinctions to its credit of being a pollution free fuel, easily accessible minus storage troubles and being available at very competitive rates.
Uninterrupted supply--The source of PNG supply in Delhi is the famous Hazira-Bijaipur-Jagdishpur (HBJ) pipeline of GAIL (India) Limited. PNG offers the convenience of ensuring continuous and adequate supply of PNG at all times, without any problems of storing gas in cylinders.
Unmatched convenience--PNG eliminates the tedious routine of checking LPG refill cylinder for any suspected leakage, or it being underweight, at the time of delivery. Moreover, the user is spared the inconvenience of connecting and disconnecting the LPG cylinder when out of gas. Precious space, occupied by LPG cylinders is also saved.
Safety --The combustible mixture of natural gas and air does not ignite if the mixture is leaner than 5% and richer than 15% of the air-fuel ratio required for ignition. This narrow inflammability range makes PNG one of the safest fuels in the world.
Economy with PNG --PNG has been positioned to be cheaper than alternative fuels being used viz domestic LPG in case of House Hold, commercial LPG in case of Small Commercial and LPG Bulk & LDO in case of Large Commercial.
A versatile fuel --Natural gas is being used predominantly as a versatile fuel in many major cities catering to domestic and commercial applications, as a cooking fuel, for water heating, space heating, air conditioning, etc.
Environment friendly –Natural gas is one of the cleanest burning fossil fuels, and helps improve the quality of air, especially when used in place of other more polluting energy sources. Its combustion results in virtually no atmospheric emissions of sulphur dioxide, and far lower emissions of carbon monoxide, reactive hydrocarbons and carbon dioxide, than combustion of other fossil fuels. When natural gas burns completely, it gives out carbon dioxide and water vapour only.
No storage problems and stock accounting--PNG does not require any storage tank or storage space since it is supplied to you through pipelines. Also, the manpower and time that was earlier being used for ensuring minimum stock levels of LPG, HSD and LDO, can be used elsewhere. The other functions that accompany storing these fuels – monitoring stock levels, checking the quality and quantity of fuels received have also been rendered unnecessary.
Economy with PNG--PNG has been presently positioned to be cheaper than alternative fuels. For small commercials the pricing is indexed to 19 Kg LPG cylinders after adjusting for heat values. For Large Commercials, pricing is indexed to 90% LDO and 10% Bulk LPG again after adjusting for heat values.
No daily contact--The consumer is spared the task of contact with oil companies and co-ordinating with them for ensuring the daily supply of fuel, because PNG is supplied directly through pipes.
No spillage and pilferage--In case of spillage of fuels like HSD and LDO, there are liable to be immense product losses.
Lower maintenance cost --With PNG, soot or ash accumulation and greasy spillages are absent from your appliance. Maintenance costs are, thus, driven down.
Valuation---
At current market price, stock is trading at 11.2 X multiple of its FY2010 estimate earnings. We recommend investors “BUY” “Indraprastha Gas Limited” for medium to long-term investment horizon.
At current market price, stock is trading at 11.2 X multiple of its FY2010 estimate earnings. We recommend investors “BUY” “Indraprastha Gas Limited” for medium to long-term investment horizon.
Source: Internet (By Abhishek Jain)
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