According to the rationale, the ratings reaffirmation factors in the company’s favourable business risk profile arising from its current exclusive position in the city gas distribution (CGD) business in Delhi (or National Capital Territory, NCT) and infrastructure exclusivity (up to December 2023) for its NCT operations.
The ratings also draw comfort from the favourable demand outlook and growth prospects for the Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) segments over the medium to long term and the company’s secure gas tie-up with GAIL for a large portion of its current operations.
The ratings also reflect the company’s strong financial risk profile with robust profitability and cash generation from operations and its strong return and credit metrics. Further, the ratings favourably consider IGL’s strong parentage, with GAIL and BPCL being the main shareholders.
At around 2:25 PM, Indraprastha Gas was trading at Rs586.80 apiece up by Rs22.75 or 4.03% on Sensex.