MC EXCLUSIVE Mahanagar Gas eyes renewable asset purchases, plans Rs 1,300 crore capex in FY27

The company plans to spend Rs 1,200-1,300 crore in the next fiscal year, in line with the current fiscal.

• MGL plans Rs 1200-1300 crore capex for CNG and renewables expansion next year.
• Company targets net-zero by 2036, adding 70 CNG and 3-4 LNG stations.
• MGL diversifies into EVs, batteries, green hydrogen, and renewable energy assets

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Mahanagar Gas Ltd (MGL), the supplier of piped gas and CNG across Mumbai and parts of Maharashtra, is exploring acquisitions of renewable energy assets while stepping up the expansion of its compressed natural gas (CNG) network, Managing Director Ashu Shinghal said in an interview.

The company plans to spend Rs 1,200-1,300 crore in the next fiscal year, in line with the current fiscal.

“We are looking for acquisitions of some renewable energy assets to expand our clean energy portfolio. We are also doing a pilot project on green hydrogen and looking at CBG pants actively,” Shinghal said. The company has set a net-zero target for 2036.

While diversifying into clean energy, the company aims to remain focused on its core business segments, including city gas distribution. MGL plans to add 70 new CNG stations in the coming fiscal year in addition to the 75 stations being added in FY26.

“We will add another 3-4 LNG (liquified natural gas) stations next year (2026-27). This year, we have added around 3 LNG stations,” Shinghal said, adding that the company will continue to add 3.5 lakh domestic PNG (piped natural gas) connections in the next fiscal.

Speaking on the reduction in APM (Administered Price Mechanism) gas allocation, Shinghal said the company’s dependency on APM has effectively decreased, and it is prepared for a further reduction.

“Effectively, we can manage with reduced gas of APM. Going forward, the APM gas allocation may come down further. So we are prepared for that scenario because we are entering into different contracts with different indices,” he said.

In April last year, the government cut the allocation of APM gas to city gas distributors by up to 20 percent, replacing it with equal or greater volumes of new well gas (NWG), which is more expensive.

Shinghal noted that the reduction in APM is being offset by new well gas, high-pressure, high-temperature (HPHT) gas, spot purchases, Brent-linked contracts, and exchange-based sourcing. The company presently prefers Brent-linked contracts due to better liquidity and their stability. The company does not expect any major price shocks over the next two years.

MGL has also outlined plans to enter the battery and electric vehicle manufacturing sectors.

“We have taken some equity in the electric vehicle (EV) manufacturer 3EV. Battery prices have come down significantly. In battery manufacturing, we are also exploring some options,” Shinghal said.