Why IGL, MGL, Adani Total, and Gujarat Gas Shares Are Dropping Up to 7% – Key Reason Explained

On 16th April 2025, the stocks of urban gas distribution firms such as Indraprastha Gas (IGL), Mahanagar Gas (MGL), Adani Total Gas, and Gujarat Gas plummeted by a great deal, decreasing by up to 7%. 

This was prompted by the Indian government's move to cut the share of relatively lower Administered Price Mechanism (APM) gas, affecting the profitability of the companies.

A decline in Share Prices

MGL registered the steepest decline, its shares declining by 6.45% to a low of Rs 1,231 on the BSE. Shares in IGL dipped 3.8% to Rs 172, and Adani Total Gas fell 1.48% to Rs 602.20.

Gujarat Gas dipped over 1% at Rs 427.20 as of mid-morning. In market reports, MGL stock declined by 4.81% to Rs 1,252.60 at 10:42 AM, which reflected investors' anxiety about costs escalating.

Also Read: IREDA Share Price Today: Stock Rises Over 7% - Here's Why

Reason Behind the Downturn

The government cut the APM gas allocation, reducing compressed natural gas (CNG) supply by 18–20%, and cutting the proportion of lower-cost domestic gas from 51% to 40%. 

This compels companies to rely on more expensive imported liquefied natural gas (LNG), compressing margins. CLSA (Commercial License and Support Agreement) stated that IGL and MGL are under extreme stress with this shift, as rising input costs may result in consumer price hikes.

Recent Trends and Market Reaction

Investors posed fears regarding the long-term effects on these stocks. Reducing APM gas allotment is part of the government's overall energy policy aimed at balancing domestic output against export requirements.

Analysts indicate that firms can seek alternative procurement techniques or transfer costs to the consumers, which may influence demand.
This development highlights the instability in the energy industry, as investors are watching closely how these companies respond to the new supply dynamics.