Mahanagar Gas stock price: Mahanagar Gas Ltd (MGL) witnessed a steep plunge in its share prices, plummeting as much as 16.67 per cent during intraday trade on Wednesday, March 6, 2024. This downturn followed a sharp downgrade from brokerage firm Citi, which revised its rating on MGL's stock from "buy" to "sell." Additionally, Citi slashed its price target on the stock to Rs 1,405 from Rs 1,480.

The downgrade came on the heels of mounting regulatory concerns surrounding MGL's margins. Citi expressed apprehension about potential risks to MGL's margins, particularly in light of recent statements made by India's oil minister, Hardeep Singh Puri. The minister's remarks suggested that consumers have not fully benefited from government gas reforms, hinting at possible interventions to ensure consumer welfare despite resistance from industry players.

Citi's downgrade highlights renewed anxieties over MGL's exclusivity and margins, given its vulnerability to regulatory shifts, especially considering the premium it commands. The brokerage underscored the looming negative catalysts that could impact MGL's performance in the coming months.

Furthermore, Mahanagar Gas slashed the prices of Compressed Natural Gas (CNG) by Rs 2.5 per kilogram on Tuesday, attributing the reduction to declining natural gas prices. The revised price, effective immediately, stands at Rs 73.5 per kilogram. This move reflects a broader trend, with Gujarat Gas also reducing prices in the industrial segment due to a drop in spot LNG prices.

Mahanagar Gas shares were trading significantly lower, witnessing the most substantial single-day decline since its listing in 2016. Currently, MGL shares are down 16 per cent at Rs 1,314.20 on the National Stock Exchange (NSE), while Indraprastha Gas Ltd (IGL) also experienced a notable dip of 7 per cent.