Pricing Supplement No. 004                 Filing under Rule 424(b)(2)
Dated March 26, 1997                        Registration No. 333-22347

(To  Prospectus  dated  March  18, 1997,  supplemented  by  Prospectus
Supplement dated March 21, 1997)

                             $300,000,000
                     NIPSCO CAPITAL MARKETS, INC.
                           Medium-Term Notes
              Due Nine Months or More From Date of Issue
                        ----------------------

            Entitled to the benefit of a Support Agreement
        Providing for the Payment of Principal and Interest by
                        NIPSCO Industries, Inc.
                         --------------------
                                                               

Principal Amount:                 $2,000,000                      Interest Payment Date(s):         March 15, and
Trade Date:                       March 25, 1997                                                    September 15 
Original Issue Date:              March 31, 1997                  Specified Currency:               U.S. Dollars
Interest Rate:                    7.82%                           Selling Agent s Commission:       $15,000
Stated Maturity Date:             April 03, 2017                  Net Proceeds to the Company:      $1,985,000
Form :   XX  Book Entry ___ Certified



The Medium-Term Note described in this pricing supplement is being
sold through Merrill Lynch & Co. as Agent.

Prior to the date of this Pricing Supplement, $34,000,000 Medium-Term
Notes have been sold.   Concurrently herewith, the company is also
selling (1) $10,000,000 aggregate principal amount of Medium-Term
Notes with a Stated Maturity Date of April 3, 2017 and bearing an
interest rate of 7.82% at the initial price to the public equal to
100% of par, less a fee to Goldman, Sachs & Co., as Agent, equal to
0.75%; (2) $50,000,000 aggregate principal amount of Medium-Term Notes
with a Stated Maturity Date of April 1, 2004 and bearing an interest
rate of 7.39% at the initial price to the public equal to 100% of par,
less a fee to Goldman, Sachs & Co., as Agent, equal to 0.6%; (3)
$2,000,000 aggregate principal amount of Medium-Term Notes with a
Stated Maturity Date of April 2, 2007 and bearing an interest rate of
7.45% at the initial price to the public equal to 100% of par, less a
fee to Goldman, Sachs & Co., as Agent, equal to 0.625%; (4) $6,000,000
aggregate principal amount of Medium-Term Notes with a Stated Maturity
Date of April 1, 2022 and bearing an interest rate of 7.99% at the
initial price to the public equal to 100% of par, less a fee to
Goldman, Sachs & Co., as Agent, equal to 0.75%; (5) $8,000,000
aggregate principal amount of Medium-Term Notes with a Stated Maturity
Date of April 1, 2022 and bearing an interest rate of 7.99% at the
initial price to the public equal to 100% of par, less a fee to
Merrill Lynch & Co., as Agent, equal to 0.75%; (6) $6,000,000
aggregate principal amount of Medium-Term Notes with a Stated Maturity
Date of April 1, 2022 and bearing an interest rate of 7.99% at the
initial price to the public equal to 100% of par, less a fee to Morgan
Stanley & Co. Incorporated, as Agent, equal to 0.75%; and (7)
$10,000,000 aggregate principal amount of Medium-Term Notes with a
Stated Maturity Date of April 3, 2017 and bearing an interest rate of
7.92% at the initial offering price to the public equal to 100% of par
less a fee to Goldman, Sachs & Co., as Agent, equal to 0.75%.

GOLDMAN, SACHS & CO.     MERRILL LYNCH & CO.      MORGAN STANLEY & CO.
                                                  Incorporated