India is putting serious money behind a fuel that starts with something far less glamorous – organic waste.
The Union Cabinet has approved the GOBARdhan, or Galvanizing Organic Bio-Agro Resources Dhan, National Circular Bioenergy Scheme, with a total outlay of Rs 23,731 crore. The scheme will run from FY27 to FY36 and aims to make Compressed Biogas (CBG) a larger part of India’s energy mix.
That could create a new investment theme across the gas, biofuel, technology and engineering sectors. But which companies stand to benefit the most?
FinancialExpress.com spoke to analysts to understand which stocks could emerge as the key beneficiaries and where the risks lie.
CBG push: Why GOBARdhan matters
The government wants to turn CBG into a larger commercial energy industry rather than keeping it limited to small waste-management projects.
Under the new framework, the government will provide capital assistance of up to Rs 2 crore per tonne per day of installed CBG capacity. The scheme also provides a fixed pricing framework of Rs 2,110 per million British thermal units (MMBTU).
There is also an assured demand mechanism through Oil Marketing Companies (OMCs) and CGD networks.
Ankit Soni, Research Analyst at Mirae Asset Sharekhan said that the scale of the scheme changes the nature of the opportunity, “The Rs 23,731 crore national GOBARdhan scheme provides capital backing, fixed pricing, and assured offtake via Oil Marketing Companies (OMCs) and City Gas Distribution (CGD) networks.”
He added that , “The GOBARdhan framework is India’s newly approved national policy package to scale up Compressed Biogas (CBG) production by converting organic waste into clean fuel, organic manure and rural income. It is the government’s attempt to make CBG a bankable, large-scale energy sector rather than a small waste-management activity.”
CGDs may have a cleaner downstream opportunity
The next question is about the companies that will actually distribute the fuel. The government has set a CBG blending trajectory of 3% in FY27, 4% in FY28 and 5% from FY29 in CNG transport and domestic Piped Natural Gas (PNG) segments.
Soni prefers city gas distributors for this part of the theme, adding “I prefer CGD companies (Indraprastha Gas, Mahanagar Gas) for the cleaner downstream play.”
He also mentioned Gujarat Gas and Adani Total Gas as potential beneficiaries, although the stock-specific impact would depend on factors such as their CNG and PNG mix, CBG sourcing and procurement economics.
What about the large OMCs?
Soni believes Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) will participate in the CBG ecosystem, but the financial impact is likely to remain relatively small compared with their much larger refining and fuel businesses.
CBG push: Why analysts prefer CGDs over OMCs
Dhaval Popat, Analyst – Energy at Choice Institutional Equities, also sees CGDs as the lower-risk route to the CBG theme. “We favour CGDs over OMCs for lower-risk proximity to the CBG theme.”
He explained the difference between the two models.“Captive production would expose OMCs to biomass sourcing, plant operations and rural logistics — the sector’s historical bottlenecks.” On the other hand, “CGDs instead procure CBG from third-party producers and distribute it through established city-gas networks.”
That could give CGDs exposure to rising CBG volumes without taking on the full operational complexity of producing the fuel themselves.
Popat added, “The rising blending obligation (reaching 5% from FY2028-29) creates assured demand for producers and defined volumes for CGDs.”
However, CBG is currently more expensive than cheaper Administered Price Mechanism (APM) gas. The impact on CGD margins will therefore depend on how much of the additional cost can eventually be passed on to customers.
Why Praj Industries could be an early beneficiary
Soni believes the biggest opportunity could emerge before the CBG reaches the consumer.
“The policy is not just a fuel-marketing policy, it is a capacity-creation policy. The cleanest exposure is upstream of the fuel, i.e., plant technology and EPC because equipment makers capture the capex regardless of which operator’s plant succeeds,” added Soni.
He pointed out that to Praj Industries is one of the more visible listed companies positioned around this theme. “The framework gives long-term demand via CGD obligations, stable price support of Rs.2,110/MMBTU, capital assistance of up to Rs.2 crore per tonne per day of installed CBG capacity, and a 10-year implementation period from FY27 to FY36,” he explained.
Soni said, “That makes the CBG buildout resemble an EPC and technology capex cycle. Praj is one of the more visible listed Indian companies with CBG technology offerings, feedstock flexibility, biogas purification capability and prior CBG project references.”
Praj’s technology portfolio covers renewable gas production from agricultural residues, press mud, spent wash, cattle dung, food waste and municipal waste.
The government has said the GOBARdhan programme builds on more than 200 commissioned CBG plants. The next phase is aimed at taking the industry towards a much larger national network.
According to Soni, “Praj has already re-rated on this theme, and challenges include input cost prices, project delays and slow backlog conversion. CBG opportunity has to convert into profitable orders, not just a bigger pipeline.”
Praj Industries Q1FY27 results
Praj Industries reported a strong performance for the first quarter of FY27.
| Praj Industries | Q1FY27 | Q1FY26 | YoY change |
| Revenue from operations | Rs 716 crore | Rs 640 crore | +12% |
| Net profit | Rs 12 crore | Rs 5 crore | +117% |
TruAlt Bioenergy: the direct CBG bet
For investors looking for a company directly exposed to CBG production, Emkay’s Popat has a different preference.
“Though, currently we have limited coverage – we prefer TruAlt Bioenergy in CBG space,” he noted. He added that the company’s joint venture with GAIL (India) could further support its position.
“These capabilities provide an edge in feedstock sourcing and project execution versus newer entrants,” he added.
Popat also sees potential from the company’s multi-location CBG expansion. He said, “Its multi-location CBG expansion, supported by blending mandates and assured offtake arrangements, makes TruAlt one of the most direct listed producer plays on India’s emerging decentralized waste-to-energy market.”
At full scale, he estimates that TruAlt could account for around 22% of industry CBG volumes, while its CBG business could generate Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margins of more than 50%.
TruAlt Bioenergy Q1FY27 results
The company reported a sharp improvement in its financial performance for the quarter ended June 30, 2026.
| Financial metric | Q1FY27 | YoY change |
| Net profit | Rs 57.15 crore | +1,108.3% |
| EBITDA | Rs 132.76 crore | +219.6% |
| Profit before tax | Rs 78.45 crore | +1,252.6% |
What investors should watch now
The Rs 23,731 crore scheme creates opportunities across the CBG value chain. Praj Industries could benefit from plant technology and EPC demand. Indraprastha Gas and Mahanagar Gas offer downstream CGD exposure, while TruAlt Bioenergy provides a more direct CBG production play.
Feedstock costs, project execution, plant utilisation, procurement economics and the ability of CGDs to pass on higher CBG costs will remain crucial.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.