Indraprastha Gas Ltd (IGL) @ Rs 255 ~ up 5+% ~ Playing Options better than Spot

IGL is an Event based call 

Indraprastha Gas Ltd (IGL)@ Rs 255 ~ up 5+% today ~was discussing it yesterday morning and it made good sense playing Options  rather than Spot ~ The 52 Week High Low is Rs 453 (7/9/2011) and Rs 170(10/4/2012) ~On July 25,2012 IGL actually touched a low of Rs 210 though it closed at Rs 230+ with a weighted average of Rs 228 ~ clearly Rs 210 must have been a freak trade or lasted for just seconds

On June 1,2012,IGL informed the BSE and NSE that the Honourable High Court of Delhi had squashed the April 9,2012 Order of the Petroleum & Natural Gas Regulatory Board  (PNGRB) stating that it had no power to fix any component of network tariff or compression charges for any entity such as the petitioner IGL having it’s own distribution network ~ this relates to CNG in respect to the Delhi CGD Network of IGL

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Indraprastha_Gas_Ltd_010612.pdf

Then on July 25,2012,IGL again informed that the PNGRB had filed a Special Leave Petition (SLP) in the Honourable Supreme Court of India against the Order of June 1,2012 of the Honourable High Court of Delhi

http://beta.bseindia.com/corporates/anndet.aspx?newsid=7a66678d-f1f9-41b4-b3d0-c714848dae39&param1=1

It is likely that the SLP will come up this month for hearing,as early as next week ~ On the Supreme Court Decision the Share Price of IGL is bound to swing big either way ~ up,past Rs 275 surely and even beyond (it’s come down from Rs 450 levels last year) if the Apex Court upholds the Order~down probably to break Rs 200 again,if it rules in favour of PNGRB

NSE F & O Lot is 1000 and one could engage in playing Options ~ buy a call  and hedge it by buying a put too  ~ For a sunk premium cost of buying one call and one put contract for a Few Thousand Rupees with the right and no obligation,the payoff could be more than twice as much in the immediate short term

IGL enjoys a Market Cap of  @ Rs 3600 crs + at current price of Rs 255 ~ FV is Rs 10 and it declared a 50% dividend for FY 12 where it earned an EPS of Rs 22

All the Best ! 

4 thoughts on “Indraprastha Gas Ltd (IGL) @ Rs 255 ~ up 5+% ~ Playing Options better than Spot

  1. Oh Madhu,was discussing IGL internally and on my network to consider the risks associated with an Option Play given this Event unfolding and current Valuations ~decided to share this idea on the blog ~ Cheers

  2. Sir, may i know your views on Skumar nationwide? Its now trading below 23… it has 99% promoter holdings pledged? Isnt there any Cap on pledged holding?

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