IGL expects the new GAs to contribute around 40 per cent to its sales in the next five years.
State-run Indraprastha Gas (IGL) will invest ₹6,000 crore by FY27 in the seven new geographical areas (GAs) spread across Uttar Pradesh, Haryana and Rajasthan that it won in the 11th round of the city gas distribution (CGD) bidding.
The country’s largest compressed natural gas (CNG) retailer expects the sales contribution from these seven GAs to grow from 7 per cent to 40 per cent in five years.
“We will incur a capex of ₹6,000 crore in the new GAs in the next five years as we have to establish the entire back bone like distribution, etc. The total capex in the next five years will be ₹8,000 crore,” IGL Managing Director Sanjay Kumar told reporters here.
The remaining ₹2,000 crore will be utilised in strengthening the old GAs – Delhi, Gautambudh Nagar, Ghaziabad and Gurugram, he added.
For capex to be spent in FY23, the Managing Director said, “In FY21 our capex was ₹1,011 crore, which went up to ₹1,454 crore in FY22. In FY23, we plan to put in ₹1,600 crore of which ₹1,000 crore will be on the new GAs and ₹600 crore on the existing ones.”
Elaborating on the company’s plans for the new GAs, IGL’s Director (Commercial) Pawan Kumar said that of the seven new GAs, only Banda, Chitrakoot and Mahoba are not operational at present. After the latest bidding round, IGL has networks across 30 districts in 11 GAs across the states of Delhi, Uttar Pradesh, Haryana and Rajasthan.
“At present, these new GAs are contributing just 7 per cent to sales, which we expect to grow to 40 per cent in the next five years,” he noted.
Aggressive expansion plans
Kumar emphasised that the company is aggressively looking at expanding its presence in CNG retailing and has plans to have 1,100 CNG stations in five year from 711 at present. It also aims to increase its piped natural gas (PNG) connections to 27-27.5 lakh households from the current 20 lakh.
“We will set up 12 mega stations in Delhi, including six on the Ring Road,” the IGL chief said.
Director (Commercial) also emphasised on IGL’s plans to open a liquified natural gas (LNG) station, of which one in Ajmer is expected to be operational in 2-3 months.
“This will be for long haul vehicles like trucks and buses. We will spend ₹100-120 crore capex on setting up stations in our GAs in the next 2-3 years. This will be subject to conditions such as land, etc,” he explained.
The IGL Director also informed that the CNG retailer is also exploring setting up 50 battery swapping stations for electric vehicles (EVs) in the Delhi and the NCR region.