Delhi government’s major policy shift towards EVs

According to the policy, the state wants all cab aggregators and delivery service providers to transition towards 100% electric vehicles by calendar year 2030.

  • The policy entails 5% EVs in fleet of the likes of Uber and Ola in six months, 50% in three years and 100% in five years.
  • After three years, only EVs will get registration certificates.

This if implemented is expected to have a significant impact on the business of Indraprastha Gas (IGL).

IGL has a stronghold in Delhi-NCR. While it has won city gas distribution bids for other geographical areas, it hasn’t been able to ramp-up and generate enough revenue from other places.

  • CNG contributed 75% of IGL’s revenues in FY23. Balance was PNG.
    • out of 75%, 30% is estimated from the taxi aggregators and service providers.
      • Further, out of 30%, 50% is estimated from taxis and aggregators registered outside Delhi

The Company reported revenues of Rs 14,146 cr in FY 23. Assuming the above to be true, 15% of this i.e., Rs 2,122 cr is estimated to be the impacted segment because of the policy change.

Whether this is limited to Delhi and hence would not impact other similar players like Mahanagar Gas (MGL), Adani Gas who are focused on other regions?

Policy being only applicable to Delhi, the impact is currently limited to IGL.

However, pollution is a problem throughout the country.

If Delhi’s policy is a success and sees a smooth implementation and transition, other states would surely follow suit impacting other companies as well.

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