Why GAIL Share Price is Falling

The energy sector in India is vast and diverse. It includes oil and gas exploration companies, refiners and marketers, coal miners, power generators, and renewable energy players.

Over the past three months, the sector has been on a strong upward trend. The S&P BSE Energy Index has risen 9.1% during this period.

Within this broader rally, most major energy stocks have participated in the uptrend - but not all of them have moved in the same way.

GAIL, one of the key constituents of the index, has lagged behind. While the index gained nearly 9.1%, GAIL's stock has inched up by only 1.1%.

Even today, shares of Maharatna PSU GAIL (India) slipped sharply, falling 6.5% in early trade on Friday, 28 November.

Here's why the stock of this PSU giant tumbled in today's session.

# Lower than Expected Transmission Tariff Revision

GAIL's shares fell over 6% in early trade on Friday, 28 November, after PNGRB finally released its long-pending transmission tariff revision late last evening.

While the tariff has been increased, the final outcome was meaningfully lower than what GAIL had expected.

Under the new order, the transmission tariff has been revised to Rs 65.7 per MMBtu, up from Rs 58.6 per MMBtu, marking a 12% hike. However, this is still well below the Rs 78 per MMBtu that the company had sought.

The PNGRB order also mentioned that critical components such as actual and future capex, operating expenditure, transmission loss, working days, and revenue-sharing adjustments will be addressed only in the next tariff review, scheduled for FY 2028, with implementation from 1 April 2028.

In a CNBC-TV18 interaction, GAIL's management highlighted that this tariff hike will add Rs 12 billion (bn) to transmission EBITDA in the current year, and around Rs 13.5 bn next year.

However, the lower-than-expected tariff means the company's earlier EBITDA estimates for FY27-28 will now need to be moderated.

Why this Tariff Matters for GAIL?

The tariff outcome is crucial for GAIL because its extensive pipeline network handles nearly 90% of India's natural gas volumes. With operating and maintenance costs rising steadily, a stronger tariff increase was essential to support earnings and margins.

Moreover, the regulator has approved tariff implementation from 1 January 2026, instead of GAIL's request for 1 January 2025.

This delay, combined with the lower-than-expected hike, weighed heavily on market sentiment - ultimately causing the stock's sharp fall in today's trade.

What next?

Going forward, GAIL (India) is set to undertake several major expansion initiatives to strengthen its gas and LPG infrastructure across the country.

The company has approved a significant capacity expansion of the Jamnagar-Loni LPG pipeline, doubling its throughput from 3.25 MMTPA to 6.5 MMTPA.

The enhanced pipeline, spanning 1,107 km and costing around Rs 53.5 bn, will run through Gujarat, Rajasthan, Haryana, Delhi and Uttar Pradesh, enabling safer and more efficient LPG supply across these regions.

GAIL has also cleared the development of a 114 km natural gas spur line connecting its Vijaipur plant to BPCL's Bina refinery in Madhya Pradesh. Valued at Rs 4.5 bn, this project aligns with the refinery's ongoing capacity expansion and the addition of a new petrochemical unit.

In the clean energy space, the company has sanctioned a 20-tonne-per-day compressed biogas (CBG) plant in Sultanpur, Uttar Pradesh. Using agricultural feedstock, the unit will produce 88 tonnes of fermented organic manure (FOM) daily, supporting both renewable energy and sustainable farming.

On the capital expenditure front, GAIL plans to maintain a steady outlay of Rs 105-107 bn across FY25 and FY26.

The bulk of this spending will continue to be directed toward expanding its pipeline network and petrochemical capacity, while city gas distribution equity, E&P, renewables and operational capex will receive smaller allocations.

FY26 will also see a gradual scaling up of investments in net-zero and renewable initiatives, reinforcing GAIL's long-term shift toward cleaner energy solutions.

How shares of GAIL have performed recently

GAIL's shares are trading around Rs 174 intraday on 28 Nov 2025, after hitting an early trade low of Rs 171.8. Over the past five days, the stock has declined by 4%.

The company touched its 52-week high of Rs 213 on 6 December 2024 and its 52-week low of Rs 150 on 4 March 2025.

About GAIL

GAIL (India) is a New Delhi-based natural gas processing and distribution company operating across India and internationally. Its businesses span natural gas transmission and marketing, petrochemicals, LPG and other liquid hydrocarbons, and renewable power.

Additionally, GAIL produces LPG, propane, pentane, naphtha, fuel oil, and polymers like HDPE and LLDPE under the G-Lex and G-Lene brands, and generates energy through wind and solar assets.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

For more details about the company, you can have a look at the GAIL fact sheet and quarterly results on our website.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy Investing.

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