Oil and gas shares rally as PM says govt plans to spend Rs 7.5 trn on infra

Shares of companies advanced up to 18 per cent in intra-day trade on the BSE on Thursday after Prime Minister Narendra Modi said the government is planning to invest Rs 7.5 trillion to build infrastructure over the next five years.

Shares of Gujarat Gas zoomed 18 per cent to Rs 527, followed by Gujarat State Petronet (11 per cent to Rs 266), Indraprastha Gas (9 per cent to Rs 595), (7 per cent at Rs 1,229) and Gail (India) and Oil and Natural Gas Corporation (ONGC) by 5 per cent at Rs 142 and Rs 107, respectively.

At 10:11 am, the S&P BSE Oil & Gas index, the top gainer among sectoral indices, was up 3.3 per cent, as compared to 0.01 per cent gain in the S&P BSE Sensex.

After dedicating the Ramanathapuram–Thoothukudi natural gas pipeline and Gasoline desulfurisation unit at Chennai Petroleum Corporation Ltd and laying the foundation stone for the Rs 31,500 crore Cauvery basin Refinery at Nagapattinam, the Prime Minister said that in 2019-20, India imported over 85 per cent of oil and 53 per cent of gas to meet its domestic demands.

“We are planning to spend around Rs 7.5 lakh crore (Es 7.5 trillion) in creating infrastructure over five years,” said the Prime Minister. CLICK HERE TO READ FULL REPORT

“The government’s priority allocation of domestic gas to City Gas Distribution (CGD) sector has enabled (MGL) to access cheaper gas for compressed natural gas (CNG) and domestic business segments. MGL’s strong gas pipeline infrastructure and expanding operations in Mumbai, its adjoining areas and Raigad district will enable it to capture the benefits of the large and growing market given the low penetration,” analysts at ICICI Securities said in the company’s results update.

The environmental concerns in Delhi had brought forth the urgency of using cleaner fuels, putting the company in a sweet spot. Indraprashta Gas has a unique identity of a company with a rare mix of volume growth and strong margins. In the near term, while industrial/commercial piped Natural gas (PNG) have recovered faster, CNG sales are yet to recover fully, the brokerage firm said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link