Om Narayan, MD, Indraprastha Gas, said in an exclusive interview to CNBC-TV18, that they see FY08 turnover at over Rs 800 crore. He added that they are in the process of acquiring land for gas distribution expansion.

Narayan added that they see capex of Rs 168 crore for NCT for city gas distribution. They are looking to add 25-30 CNG stations over the next 2-3 years.

Excerpts from CNBC-TV18’s exclusive interview with Om Narayan:

Q: How is the rollout of city gas distribution going to work? You have approval in places like Greater Noida, Sonepath, Faridabad, etc. What are the regulatory hurdles and what is your overall capex plan over this cycle for the next couple of years?

A: As far as expansion plan is concerned, we have got a very ambitious plan for 2007-08 and onwards. Our work as per plans is going in the National Capital Territory, or NCT, and other places. I do not see any regulatory hurdles. Initially, there were some problems of understanding each other. We are currently having good discussions since Indraprastha Gas Limited is the first entity of India in city gas distribution, or CGD. Therefore, we have kept Rs 168 crore as our capex in NCT and NCR, for the expansion plan this year.

Q: What can you share with us about your rollout plans at this point of time, for your city gas distribution projects? What sort of investment will that entail, over the next couple of years? Do you see that the rollout has not been as aggressive?  Do you see it picking up from hereon?

A: As per the statistics, the global standard is 20% for city gas distribution, with India having only 3%. So, there is a very wide growth potential in CGD. However, the very important point in the total scenario is how does the regulator regulate the total expansion. Initial entities are doing expansion, but the question is how are they accommodating the total scenario.

So far, as the city gas distribution of IGL is concerned, it was only Rs 68 crore last year. This year, we have gone to 2.5 times that amount. So, it depends on how fast the clearances permission and the territories are obtained. Considering this, our growth pattern will be quite explosive. It is 2.5 times, in terms of capex, and we are going to attain it.

Q: What is your fund requirement and what can you share with us, in terms of how many stations you would have by 2010? How much money would you need for that? How would you go about raising that kind of money?

A: As far as our expansion activities are concerned, 2010 Commonwealth Games are already nearing. We have to add at least 25-30 CNG stations all over NCT, in order to meet the requirement. Our CNG potential, in terms of growth, is going very high.

Regarding our resources, IGL has got its own surplus and is not dependent on any other external source. However, our growth plan is basically to look forward for NCR and adjoining towns. The general perception about expansion is very simple. But considering the ground realities, it also depends on the co-operation of the state and central government, under the umbrella of the Regulatory Act.

Q: What kind of an expansion or sales volume expansion are you looking at for Indraprastha Gas? You will probably do Rs 700 crore this year. Are you expecting to be able to do Rs 1,000 crore in FY09? What is the ballpark figure you are looking at?

A: I think our growth is very consistent this year and our sales is going up by Rs 800 crore.  The product requirement and the conversion rate is very high. So, we are applying for new lands out of NCT, particularly in Noida, Gurgaon, Faridabad, Ghaziabad and Greater Noida, as these are our targeted areas. But it all depends on how things are fitting in the present regulatory set up. We are there to meet this requirement, which is anyway going to rise by 12-15% annually.