India's Petroleum and Natural Gas Regulatory Board has ordered Indraprastha Gas Ltd.(532514.BY) to lower certain tariffs and prices of the natural gas it sells in the capital city, a move that is likely to hurt the company's operating margins.
In an order issued on its website Monday, the regulator fixed the tariffs retroactively from April 2008 at levels lower than Indraprastha had been charging, and ordered it to refund the difference to its customers.
An Indraprastha Gas executive who declined to be named said the company is studying the order would comment later.
The Petroleum and Natural Gas Regulatory Board is India's downstream regulator. It has a mandate to set prices.
ICICIdirect.com, which offers retail trading and investment services, advised investors to "stay away from the stock even after a meaningful correction," citing the regulator's order, in a note early Tuesday.
Shares of Indraprastha Gas plunged to INR244.70 a share, a decline of 29.36%, in morning trade on the Bombay Stock Exchange, while the benchmark index gained 0.19%.
Indraprastha Gas is a joint venture of GAIL (India) Ltd. (532155.BY), Bharat Petroleum Corp. (500547.BY) and the state government of New Delhi to sell auto and cooking gas in New Delhi and adjacent areas.
Indraprastha gas sells piped natural gas to household consumers and compressed natural gas to automobiles in New Delhi and adjoining areas.
-By Saurabh Chaturvedi; Dow Jones Newswires; +91-11-4356-3304; [email protected]