GAIL India , the country's largest gas transmission and distribution company, is set to expand its renewable energy portfolio with a new bio-CNG plant in Bengaluru. The Karnataka Cabinet has approved the allotment of 18 acres of land to GAIL India for this purpose, marking a significant step towards sustainable energy production in the state.

Land Allocation Details

The Karnataka Cabinet has given the green light to allocate 18 acres of land to GAIL India on a 'Permissive Use' basis for a period of 25 years. The land is located in Haralakunte village, Bengaluru South Taluk, and will be used to establish a bio-CNG unit with impressive capacity:

• Initial capacity: 300 metric tonnes per day
• Expandable capacity: Up to 500 metric tonnes per day

Project Implementation

The Revenue Department and Bengaluru Solid Waste Management Ltd will play crucial roles in the project's implementation:

• Joint survey of the allocated land
• Handover of the land with proper maps

This collaborative effort ensures a smooth transition and proper utilization of the allotted area for the bio-CNG plant.

State's Initiatives in Renewable Energy

Alongside the land allocation for GAIL India's bio-CNG plant, the Karnataka Cabinet has taken additional steps to promote clean energy and regulate the biofuel sector:

1. Bio-diesel Regulation: Approval of guidelines to prevent spurious chemical sales under the bio-diesel name.
2. New Licensing Order: Decision to draft 'The Bio-Diesel (B-100) Blending with High Speed Diesel for Transportation Purposes (Licensing) Order, 2022'.

These measures demonstrate the state government's commitment to fostering a robust and reliable renewable energy sector.

Other Cabinet Decisions

The Karnataka Cabinet meeting also saw approvals for several other significant initiatives:

• Healthcare: Extension of Ayushman Bharat Arogya Karnataka scheme benefits to all senior citizens aged 70 and above.
• Hospital Infrastructure: Approval for the construction of two 100-bed hospitals at a total cost of Rs 100.00 crore.
• Digital Governance: Authorization for the procurement of 3,500 Chromebooks for revenue inspectors under the Digi Revenue Project.

These decisions reflect the government's focus on improving healthcare access, enhancing medical infrastructure, and digitizing administrative processes.

The allocation of land to GAIL India for the bio-CNG plant aligns with India's broader goals of increasing renewable energy production and reducing dependence on fossil fuels. As the project develops, it is expected to contribute significantly to Bengaluru's sustainable energy landscape and potentially serve as a model for similar initiatives across the country.

GAIL (India) Ltd. , the country's largest gas transmission and distribution company, saw its shares climb 2.8% to ₹178.74 amid expectations of a significant pipeline tariff revision. The Petroleum and Natural Gas Regulatory Board (PNGRB) is reportedly fast-tracking its decision on updating the tariffs, with an announcement anticipated in the coming days.

Potential Tariff Increase

Sources suggest that the PNGRB might implement a substantial increase in pipeline tariffs. A board member previously hinted at a possible 20% hike. GAIL's current pipeline tariff stands at ₹58.59 per million British thermal units (mmBtu), with industry observers speculating that the revised rate could approach ₹70.00/mmBtu.

Impact on GAIL's Financials

The potential tariff revision has caught the attention of major brokerages, who project a significant positive impact on GAIL's financial performance:

• Jefferies estimates that a 10% or 20% increase in tariffs could boost GAIL's transmission EBITDA by 13% and 26% respectively. Based on these projections, they have set fair value targets for GAIL's stock between ₹235.00 and ₹250.00.

• Nomura anticipates that tariffs could reach ₹70.00/mmBtu by April 2026. This increase is expected to drive a 42% year-on-year growth in GAIL's gas transmission EBIT (Earnings Before Interest and Taxes).

Long-Awaited Revision

The upcoming tariff revision is particularly significant as pipeline tariffs have remained unchanged since 2018. This stagnation persisted despite GAIL's substantial pipeline expansion and rising capital expenditure over the years.

Market Reaction

The market's positive response to the potential tariff hike reflects investor optimism about GAIL's future earnings potential. The 2.8% increase in share price indicates that market participants are factoring in the expected benefits of higher transmission revenues.

Recent Corporate Developments

In a recent corporate announcement, GAIL informed the stock exchanges about the appointment of new Joint Statutory Auditors for the fiscal year 2025-26. The Comptroller & Auditor General of India (CAG) has appointed M/s Ravi Rajan & Co. LLP and M/s Arun K Agarwal & Associates, both Chartered Accountants firms based in New Delhi, to this role. This appointment demonstrates GAIL's commitment to maintaining robust financial oversight and compliance with regulatory requirements.

As investors await the PNGRB's official announcement on pipeline tariffs, GAIL's stock remains in focus, with market participants closely monitoring developments that could significantly impact the company's financial trajectory.