LIC raises stake in Indraprastha Gas to 7.2%

Life Insurance Corporation of India (LIC), the country's largest money manager, has raised its stake in Indraprastha Gas Ltd by over 2% to become the third largest shareholder in the company.

LIC last week acquired 2.95 million equity shares of IGL - the firm that sells CNG in national capital, from the open market to increase its shareholding in the company from 5.097% to 7.204%, according to disclosures made by IGL to the stock exchanges.

Prior to this, the nation's largest life insurer held 7.13 million shares of IGL.

GAIL India Ltd, the nation's largest gas distributor, and state refiner Bharat Petroleum Corp Ltd (BPCL) hold 22.5% stake each in IGL while the Delhi Government has 5% equity.

LIC's acquisition of 2.107% additional shares has made it the third largest shareholder in IGL. Prior to this, Allard Partners Ltd with 5.93% shares was the third largest shareholder. HDFC Standard Life Insurance Co Ltd hold 4.78% stake in the firm.

IGL retails compressed natural gas or CNG to automobiles and piped cooking gas to households in Delhi and its adjoining towns - Noida, Greater Noida and Ghaziabad.

It has over 8,500 kilometres of gas pipeline network and 296 CNG stations that cater to over 7.5 lakh vehicles and over 4.3 lakh households Delhi and adjoining towns.

The company yesterday slashed CNG price by Rs 14.90 per kg and natural gas piped to household kitchens for cooking by Rs 5 per standard cubic meters.

CNG in Delhi now costs Rs 35.20 per kg Rs 40.15 in Noida, Greater Noida and Ghaziabad, IGL said in a statement on Friday evening announcing the new rates effective from February 8.

Similarly, piped natural gas (PNG) rates were cut from Rs 29.50 per scm for consumption up to 30 scm in two months to Rs 24.50 per scm for consumption of up to 36 scm in two months.

The rate cut follows oil ministry's decision to give city gas distribution firms cheaper domestic gas to meet all their needs for CNG and PNG supplies compared to the previous limit of 80% for most states.

This was the first reduction in fuel rates in almost six years. CNG rate was cut in March 2008 when prices were cut by 30 paise following a reduction in excise duty.

However, the relief may be temporary, as the prices of domestic natural gas - raw material for CNG and PNG - will almost be doubled to USD 8-8.2 from April 1. The rate hike may translate into a CNG price increase of Rs 10.6 per kg and PNG rates of Rs 8 standard cubic meters.