1 week ago
Nomura Picks MGL as Biggest Beneficiary of New APM Incentive
The government is giving city gas companies more lower-cost domestic gas.
This extra gas will be linked to new paying household customers.
The scheme starts on September 1.
Nomura thinks Mahanagar Gas could benefit the most.
MGL recently added fewer households than usual, so it may have more room to grow.
Each new household will qualify for 200 scm of extra gas.
MGL households use less gas than households served by the other companies discussed.
Investors will watch active and billed customers rather than only counting new connections.
A new scheme effective September 1 will provide CGDs an additional 200 scm of APM gas.
Nomura identifies Mahanagar Gas as the biggest potential beneficiary because of its low recent customer-addition base and lower household consumption.
MGL added about 9,700 households monthly in April-June 2026, versus its historical pace of roughly 28,000-30,000.
Indraprastha Gas added about 28,800 households monthly, while Gujarat Energy had the highest household consumption at about 131 scm annually.
Nomura estimates the incentive could reduce the payback period for PNG expansion capital expenditure from about 10 years to three years.
- Who
- Nomura and the city gas distributors Mahanagar Gas, Indraprastha Gas, and Gujarat Energy are central to the analysis.
- What
- A new incentive will provide an additional 200 standard cubic metres of APM gas for incremental paying households.
- Where
- The measure concerns the city gas distribution businesses covered by the Nomura report; no specific location is stated in the article.
- When
- The scheme takes effect September 1; the comparison uses April-June 2026 data and refers to the September-December cycle.
- Why
- The incentive is intended to improve the economics of piped natural gas expansion by providing additional lower-cost domestic gas.
Key facts
- Scheme start
- September 1
- Additional allocation
- 200 standard cubic metres of APM gas per incremental paying household
- MGL recent additions
- About 9,700 households per month during April-June 2026
- MGL historical additions
- About 28,000-30,000 households per month
- IGL recent additions
- About 28,800 households per month during April-June 2026
- Gujarat Energy household consumption
- About 131 scm per household annually
- Estimated PNG payback improvement
- From about 10 years to three years, according to Nomura
Quotes
Nomura
Brokerage house providing the research report
“Overall, we think that MGL may benefit the most given it benefits from a low customer addition base during April-June, which makes the threshold easiest for it to surpass with the highest potential incremental connections during the upcoming September-December cycle.”
financialexpress.com
“This implies that MGL has an advantage of a very low base and it can potentially get much higher APM allocation at the expense of other CGDs (given APM gas pool may not change).”
financialexpress.com
Sources
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