Mahanagar Gas, IGL, Adani Total Gas Shares Rally Up To 4% As Centre Approves PNG Incentive Scheme

Shares of Mahanagar Gas (MGL), Indraprastha Gas (IGL) and Adani Total Gas rose in early trade on Wednesday, August 19, after the government approved an incentive scheme to increase domestic piped natural gas (PNG) connections from September 1, 2026.

Mahanagar Gas shares gained as much as 3.83% to Rs 1,154 on the NSE at 10:45 AM. Indraprastha Gas rose 3.57% to Rs 154.72, while Adani Total Gas was up 2.24% at Rs 661.80.

Gujarat Energy, formerly known as Gujarat Gas, moved in the opposite direction after giving up its early gains. The stock was down 0.32% at Rs 268.55 on the NSE.

Why Are Mahanagar Gas, IGL And Adani Total Gas Shares Rising?

The gains came after the Centre announced incentives for city gas distribution (CGD) companies to increase the number of active domestic PNG connections.

Under the scheme, eligible CGD companies will get an additional 200 standard cubic metres (SCM) of domestically produced APM gas for every incremental billed domestic

The additional allocation of lower-priced domestic gas is expected to help companies lower their gas sourcing costs. It can also allow them to replace some of the more expensive imported LNG currently used in the CNG transport segment.

The government expects the scheme to reduce the payback period for capital expenditure on domestic PNG connections from around 10 years to about three years. This could encourage CGD companies to activate existing connections and expand their networks to more households.

What Are Unbilled PNG Connections?

Unbilled PNG connections are households where the pipeline network has already been laid or extended, but the connection is not active or has not yet started generating regular consumption bills.

The new scheme is intended to encourage CGD companies to convert these connections into active, paying customers. Companies will also have an incentive to take their PNG networks into new areas.

India currently has around 1.74 crore domestic PNG connections. The government is looking to increase this number as part of its efforts to expand the use of piped cooking gas.

What Is APM Gas?

APM gas, or Administered Price Mechanism gas, is natural gas produced domestically and sold at a government-administered price. It is generally cheaper than imported LNG.

Under the new scheme, CGD companies will receive additional APM gas linked to the number of incremental billed domestic PNG connections they add.

For companies such as IGL, Mahanagar Gas and Adani Total Gas, the move could improve the economics of adding new PNG customers while also helping them make better use of existing pipeline infrastructure.

What Does The Scheme Mean For Gas Stocks?

The government's move comes as India looks to expand its piped gas network and reduce dependence on imported fuels. The Centre has also taken steps on right-of-way approvals and VAT, while a unified PNG registration portal is in the works.

For city gas distributors, the incentive could help improve the utilisation of existing PNG networks and bring more households into the billing system.

The impact on earnings will depend on how quickly companies convert unbilled connections into active customers and expand their networks under the new scheme.

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