Mar 22, 2001|
CNG: Supreme Court takes the leadů
The Delhi Government has appealed to the Supreme Court for extending its ruling of plying only compressed natural gas (CNG) fuel buses in the capital after March 31, 2001. The public transportation system in the capital could come to a grinding halt, as the Government is not in a position to meet the deadline and will have to withdraw the remaining non-compliant buses.
Currently, there are 11,989 buses plying on the Delhi roads. Of these only 119 are fitted with CNG kits and only an additional 500 buses are expected to be inducted before the deadline.
Although the Government has stated its inability to meet the deadline it has passed on the buck to the commercial vehicle manufacturers (CV). The Government claims to have placed an order of 1,620 'CNG chassis' buses of which 1,100 were placed with Ashok Leyland and 510 with Telco. Ashok Leyland has supplied 104 CNG chassis while Telco has delivered only 15.
The CNG kits can either be retrofitted on the existing diesel buses or supplied to the CV manufacturers to be fitted onto the new vehicles. Each CNG kit costs an estimated Rs 400,000. There is a captive demand of 11,870 kits as these many buses are to be fitted with CNG kits so as to be applicable to ply on the roads. This results in a CNG kit market size of Rs 47.5 m for only the Delhi region. Consequently, several unorganised kit manufacturers and fitters have mushroomed in the region and authorities should be wary of these players due to non-compliance of safety requirements.
Indraprastha Gas Ltd (IGL), which supplies CNG to the automobile segment in Delhi, is a joint venture between Bharat Petroleum (BPCL), Gas Authority (Gail) and the Delhi Government. BPCL and Gail have equal stake of 22.5% in the company while the Delhi Government hold 5% and the remainder is with Financial Institutions. The company has received a directive from the Supreme Court to increase the number of CNG stations from 9 to 80. IGL commissioned 18 CNG stations in FY00 and reported a turnover and post tax profits of Rs 71 m and Rs 3.6 m respectively in this period.
The enforcement of the deadline will be a blessing for IGL as CNG demand booms. Currently, auto rickshaws and taxis are also shifting towards fitting of CNG kits. There are 7,350 CNG run auto rickshaws in Delhi.
More Views on News
Mar 27, 2017
GAIL (India) Ltd has announced results for the quarter ended December 2016. reported 9.4% year on year (YoY) decline in sales, while bottom-line grew 45.4% YoY.
Mar 17, 2017
ONGC has announced results for the quarter ended December 2016. The company has reported 9.2 % year on year (YoY) growth in sales, while bottom-line grew 197% YoY.
Jan 24, 2017
Oil India Limited announced results for the quarter ended September 2016. The company has reported an 6.5% and 7.8% Year on Year (YoY) decline in sales and net profit respectively during the quarter.
Dec 3, 2016
GAIL (India) Ltd has announced results for the quarter ended September 2016. The company has reported 16 % year on year (YoY) decline in sales, while bottom-line grew 180% YoY.
Nov 3, 2016
ONGC has announced results for the quarter ended September 2016. The company has reported 10.3 % year on year (YoY) decline in sales, while bottom-line grew 6.3% YoY.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 4, 2017
The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407