Indraprastha Gas Share price

OUR HISTORYIntroduction of Natural Gas as an alternate fuel in India - abackgroundIn 1992-93 with a view to introduce Natural Gas as an alternate fuelfor commercial use a pilot study was conducted by GAIL one of ourpromoters in Delhi Mumbai and Vadodara in collaboration with theDehradun-based Indian Institute of Petroleum. The primary objective ofthe study was to establish the feasibility of using Compressed NaturalGas ("CNG") as an alternate fuel. The data generated was carefullyanalyzed and applied to field experiments that included plying oftransport buses and light commercial vehicles ("LCV's) on CNG. Toexpand the (rials into actual practice CNG outlets were commissionedin Delhi.This study established CNG as a suitable alternative to conventionalvehicular fuels such as petrol and diesel and removed apprehensionswith regard to handling transportation storage and usage of CNG.These findings set the stage for the actual implementation in 1997 inthe form of Delhi City Gas Distribution Project a pilot projectstarted by GAIL to provide city gas or natural gas to the nationalcapital. The project focussed on establishing the viability ofsupplying and distributing CNG and PNG in the city analysing effectson air pollution and resolving technical and safety issues.Company BackgroundGAIL and BPCL decided to contribute their skills knowledge andresources for mutual benefit through a joint venture company for supplyof PNG LPG and CNG to the domestic and commercial sectors and; supplyof CNG for the automobile sector in the NCT of Delhi.In 1998. the Ministry of Petroleum and Natural Gas Government of Indiavide its D.O. Letter No. L-11012/4/97-GP dated July 17. 1998 approvedthe implementation of Delhi Gas Distribution Project by a joint venturecompany to be formed by GA1L and BPCL. It further stipulated that thisjoint venture company would have equity participation of 22.5% each byGA1L and BPCL 5% by Government of NCT of Delhi and balance to beraised from financial institutions/public issue.Our Company was incorporated on December 23 1998 under the CompaniesAct 1956 and received certificate of commencement of business onFebruary 12 1999. The initial contribution to our capital was made byGA1L BPCL and the nominated employees of these two companies.In 1999 we acquired the Delhi City Gas Distribution Project. Theproject covered creating CNG infrastructure for distribution of CNG toautomobiles in the National Capital Territory of Delhi and laying ofnatural gas pipeline network for piped natural gas distribution.A joint venture agreement ("JV Agreement") dated April 27 2000 wasentered between GA1L and BPCL for amongst other things organisationpromotion and operations of IGL. For details of this agreement pleaserefer to the paragraph "Joint Venture Agreement and our otherAgreements" on page 23 of this Red Herring Prospectus.We took over the assets of the City Gas Distribution Projectaggregating Rs. 189843510 from GA1L. An Asset Transfer Agreementdated June 9 2000 was signed between GA1L and us. For details of thisagreement please refer to the paragraph "Joint Venture Agreement andour other Agreements" on page 23 of this Red Herring Prospectus. Weissued 18984351 Equity Shares of Rs. 10/- each having nominal valueof Rs. 189.84 million to GA1L as consideration thereof.We issued 77000000 Equity Shares of Rs. 10 each for cash at par toDFC 1LFS UTI and Government of NCT of Delhi on September 25 2000.For details of our Share Capital history please refer to Notes toCapital Structure on page 7 of this Red Heiring Prospectus.Thereafter we have grown at a rapid pace. As of August 31 2003 wehad a network of 115 CNG stations and network of pipelines. For detailsof our Network please refer to the paragraph "Business" on page 10 ofthis Red Herring Prospectus.Since the CNG project has been implemented as per the directives ofSupreme Court under stringent timefranic some of the proceduralformalities have not been completed and we are in the process ofcompleting the formalities for making applications for the grant oflicense under the Delhi Factory Rules in respect of 50 CNG stationswhich are required in the ordinary course of business. The appropriatelicensing authority has the authority and right to refuse the grant oflicense in the event of non-compliance with the provisions of theFactories Act. 1948 or the rules. However the reason for such refusalof license has to be communicated in writing to the Company. IGL hasnot received any such communication from authorities.The Supreme Court of India in its directives in the case of M.C. Mehtav. Union of India JT 1998 (5) SC 211 (the "M. C. Mehta Case") directedfor usage of clean fuel by certain types of vehicles plying in NCT ofDelhi. For details of the various directives of the Supreme Courtplease refer paragraph "Industry Background" on page 11 of this RedHerring Prospectus. We utilized the growth impetus provided by some ofthese directives and successfully implemented the Natural Gasdistribution network of pipelines compressors and CNG stations under achallenging time frame. This network has been rolled out in a span of56 months. This was achieved in the backdrop of high vehicle complexityin terms of number and variety of vehicles operating in Delhi.Business Growth: The following table lists the growth in our sales ofCNG and PNG from 2001 to 2003.For the year endingMarch 31 2001 2002 Rs. in mn % * Rs. in mn %*CNG business 196.6 71% 1100.2 93%PNG business 79.7 29% 87.5 7%Total CNG &PNG sales 276.3 100% 1187.7 100% 2003 As on June 2003 Rs. in mn %* Rs. in mm %* 2963.5 97% 922.6 97% 105.6 3% 31.2 3% 3069.1 100% 953.8 100%* %age of total revenueWe have been sanctioned a loan from the Oil Industry Development Board("01DB") established under Oil Industry (Development) Act 1974 for anamount of Rs. 3000 million. Out of the total sanctioned amount of Rs.3000 million we have availed of an amount of Rs. 680.0 million andthe balance outstanding as on March 31 2003 was Rs. 648.75 million.The loan is repayable over a period of 10 years in eight equal annualinstallments from the date of draw down with two years moratorium forrepayment of the principal amount.Awards: We have won the "Indo-German Green-Tech Environment ExcellenceAward" awarded by Green-Tech Foundation New Delhi for the year1999-2000 for our endeavour to promote CNG as clean safe andenvironment friendly fuel for improving the Delhi city environment.Delhi has been awarded the "Clean Cities International Partner of theYear Award 2003" by the Department of Energy Government of UnitedStates of America for converting the public transport to CNG. As thesole supplier of CNG in Delhi we have contributed significantly inthis regard.