by Madhav Agarwal, Siddharth Singh Bhaisora
Published On June 4, 2024
As the global energy landscape shifts towards more sustainable and eco-friendly solutions, green hydrogen has emerged as a crucial component in the transition away from fossil fuels. Green hydrogen is produced through the electrolysis of water using renewable energy sources such as wind and solar power, resulting in a clean fuel that emits only water vapor when used. This makes it an attractive option for reducing greenhouse gas emissions and combating climate change.
India, with its abundant renewable energy resources and ambitious climate goals, is poised to become a major player in the green hydrogen market. The Indian government has recognized the potential of green hydrogen and has laid out comprehensive plans to boost its production and utilization. This includes significant budget allocations for the green hydrogen sector in the Union Budget 2024-25, as well as various incentives and policy support to encourage investment and innovation in this space.
Investing in green hydrogen stocks in India could be interesting as demand for green hydrogen is expected to rise significantly in the coming years, driven by its versatile applications across industries such as energy, transportation, and manufacturing. Companies leading the charge in this domain are well-positioned to reap substantial benefits.
In this article, we explore green hydrogen stocks in india, the top 7 green hydrogen stocks to buy in India in 2024. These companies are at the forefront of the green hydrogen revolution, leveraging their expertise, infrastructure, and commitment to sustainability to drive growth and innovation. The list includes prominent names such as Reliance Industries, JSW Energy, Larsen & Toubro, Adani Green Energy Ltd, NTPC, Indian Oil Corporation, and Bharat Petroleum Corporation. We will delve into their green hydrogen initiatives, financial health, and market potential, providing you with a comprehensive guide to making informed investment decisions in this exciting sector.
Green hydrogen has several advantages over traditional energy sources and even other forms of hydrogen production. The primary benefit is its environmental impact. Unlike grey hydrogen, which is produced from natural gas and emits significant CO2, green hydrogen is entirely renewable and produces zero emissions. This makes it a cornerstone for achieving net-zero targets globally.
Moreover, green hydrogen is versatile. It can be used in various sectors, from powering fuel cells in vehicles to being a raw material in industries like steel and chemicals. This wide range of applications opens numerous avenues for growth and investment. As countries and companies worldwide commit to reducing their carbon footprints, the demand for green hydrogen is poised to skyrocket.
India's commitment to green hydrogen is evident from its policy initiatives and investment plans. The National Hydrogen Mission, launched by the government, aims to make India a global hub for green hydrogen production and export. The mission focuses on creating an ecosystem for the production, utilization, and export of green hydrogen.
The Union Budget 2024-25 has further bolstered this commitment with substantial allocations to the green hydrogen sector. These funds are earmarked for research and development, infrastructure development, and subsidies to make green hydrogen production economically viable. The government's proactive approach is expected to attract significant private sector investment, driving innovation and expansion in the industry.
The success of green hydrogen largely depends on the availability of renewable energy sources. India is blessed with abundant solar and wind energy, making it an ideal location for green hydrogen production. Companies in India are increasingly investing in large-scale renewable energy projects to support their green hydrogen initiatives.
For instance, Reliance Industries has announced plans to build one of the world's largest integrated renewable energy manufacturing facilities, which will include solar, battery, and hydrogen production units. Similarly, Adani Green Energy is rapidly expanding its renewable energy portfolio, aiming to become a leading producer of green hydrogen.
The global market for green hydrogen is expected to grow exponentially in the coming years. According to a report by the International Energy Agency (IEA), green hydrogen could meet up to 24% of the world's energy needs by 2050. This presents a massive opportunity for companies involved in green hydrogen production and technology.
India, with its vast renewable energy resources and growing industrial base, is well-positioned to capture a significant share of this market. Investing in green hydrogen stocks in India allows investors to participate in the growth of this promising sector while contributing to global sustainability goals.
Green hydrogen is produced using renewable energy sources like wind and solar power, making it a sustainable and eco-friendly energy solution. India has set ambitious targets for green hydrogen production, aiming to become a global hub for green hydrogen by 2030. The Union Budget 2024-25 has allocated significant funds to support the green hydrogen sector, further boosting its growth.
Let’s look at the top 7 green hydrogen stocks in India to consider investing in 2024:
Reliance Industries is a multifaceted Indian conglomerate with business interests spanning from retail to energy. It has established itself as a significant player in the green hydrogen sector, focusing on the production of this clean fuel for both domestic use and global distribution. The company is actively integrating green hydrogen and carbon dioxide to develop new eco-friendly products such as fertilizers and fuels, showcasing its commitment to sustainability.
To enhance its green hydrogen production capabilities, Reliance Industries has partnered with a Norwegian company to acquire advanced technology. This collaboration aims to bolster their efforts in building a large complex in India, which will include a state-of-the-art green hydrogen production facility. With strong backing from the Indian government, Reliance plans to significantly ramp up its green hydrogen output by 2025 and achieve carbon neutrality by 2035.
Furthermore, Reliance Industries has set an ambitious target to install 100 GW of renewable energy units by 2030, reinforcing its leadership in the clean energy sector. The company's substantial investments in green hydrogen and renewable energy are geared towards establishing itself as a major global player in this field.
JSW Energy, a major Indian power company, is leading the way in green hydrogen production. The company has announced the development of the largest green hydrogen project in India, which will be utilized to produce steel without causing pollution. This initiative is part of JSW Energy’s broader strategy to decarbonize its energy portfolio and contribute to sustainable industrial processes.
JSW Energy has already made agreements to supply green hydrogen to another company and has received permission to increase its production capacity. The company has also won an award to build a significant plant dedicated to green hydrogen production. Additionally, JSW Energy has entered into a seven-year agreement with JSW Steel to supply 3,800 tonnes of green hydrogen per annum along with the associated green oxygen, with the commission expected to be operational by Q1 FY25.
Larsen & Toubro is a diversified Indian multinational engaged in various sectors, including construction, engineering, and technology. Recently, L&T has made significant strides in the green hydrogen domain. In March 2024, the company successfully manufactured its first green hydrogen production machine in India, a testament to its technological prowess and commitment to sustainable energy solutions.
L&T has also established a joint venture with two other companies to invest heavily in green hydrogen projects over the next few years. This strategic collaboration aims to accelerate the development and deployment of green hydrogen technologies. Additionally, L&T is contributing to the construction of the world’s largest green hydrogen factory in Saudi Arabia, underscoring its global ambitions in the green hydrogen market.
Adani Green Energy Ltd is a major player in the renewable energy sector, focusing on solar and wind power. The company is constructing the world’s largest hybrid renewable energy plant in Gujarat, India, which will cover an area larger than Paris. This facility will utilize both solar and wind energy to generate electricity around the clock.
Adani Green Energy already manufactures solar panels and wind turbines and plans to scale up production in the coming years. This massive project is expected to significantly reduce carbon emissions, aligning with India’s goals to curb pollution. The company plans to invest substantial sums to continue its growth trajectory in the renewable sector.
NTPC, India’s largest power utility, is increasingly investing in renewable energy, including green hydrogen. The company is set to build India’s largest green hydrogen project in Andhra Pradesh, utilizing renewable energy for hydrogen production. NTPC has also secured agreements with the governments of Maharashtra and Rajasthan to further expand its renewable energy initiatives, including green hydrogen.
The company’s strategic vision includes producing substantial quantities of green hydrogen by 2030 and significantly increasing its renewable energy capacity by 2032. NTPC is also planning to issue shares of its renewable energy subsidiary to raise funds and support its future plans.
Indian Oil Corporation, traditionally reliant on fossil fuels, is transitioning towards green hydrogen. Although oil remains a significant part of its portfolio, IOC is preparing for a future dominated by cleaner fuels like green hydrogen and biofuels. In April 2024, IOC restarted the process of finding a contractor for its first green hydrogen plant in Panipat, following an initial setback due to procedural issues.
The new tender process mandates consortium-based bids, ensuring that each member holds a significant stake in the project. IOC aims to integrate green hydrogen production units across all its refineries as part of its strategy to achieve carbon neutrality by 2046.
Bharat Petroleum Corporation Limited, a prominent government-owned oil and gas company, is making significant inroads into the green hydrogen sector. BPCL has partnered with Kochi Airport to establish a green hydrogen production plant and a fueling station for hydrogen-powered vehicles. This pilot project aims to explore the practical applications of hydrogen in transportation.
BPCL’s goal is to achieve carbon neutrality by 2040, and it is investing in cutting-edge technology from an Indian company to reduce the costs associated with green hydrogen production. This initiative is part of BPCL’s broader strategy to transition towards more sustainable energy solutions.
The Union Budget for 2024-25, presented by Finance Minister Nirmala Sitharaman, underscores the need for a sustainable and resilient economy. Building on the interim budget, the current budget places significant emphasis on energy security and agricultural sustainability, further advancing India’s Nationally Determined Contributions (NDCs). Several provisions in the budget are poised to impact the Green Hydrogen sector, reflecting the government's commitment to a cleaner and greener future.
Boost to Energy Storage and Capacity Creation:The budget proposes measures to enhance energy storage capabilities and increase capacity in the renewable energy sector. A notable allocation is the Rs. 600 crore set aside for the National Green Hydrogen Fund, aiming to help India achieve 'net zero' emissions by 2070.
Increased Funding for Solar Power Projects Funding: For solar power projects has been significantly increased to Rs. 10,000 crore, marking a 110% rise from Rs. 4,757 crore in the previous fiscal year. This increase supports the PM – Surya Ghar: Muft Bijli Yojna, which aims to install up to 1 crore solar rooftop systems in residential areas, contributing to the nation's renewable energy goals.
Ministry Allocations: The Ministry of New and Renewable Energywill receive Rs. 19,100 crore in 2024-25, a substantial increase from the Rs. 10,222 crore allocated in 2023-24. In contrast, the allocation for the Ministry of Power has slightly decreased to Rs. 20,502 crore from Rs. 20,671 crore in the previous fiscal year. This shift indicates a focused effort on renewable energy sources over traditional power generation.
The National Green Hydrogen Mission, launched as part of the National Budget 2023, received an allocation of Rs. 19,700 crore to foster hydrogen as a clean and renewable energy source. The mission's primary objectives include:
Increasing Hydrogen Production: Boosting the production of green hydrogen to reduce dependence on fossil fuels.
Promoting Clean Technologies: Developing technologies for hydrogen production, such as hydrolysis, steam methane reforming, and biomass gasification.
Achieving Energy Independence: Aiming for energy independence by 2047 and net zero emissions by 2070.
The National Green Hydrogen Mission is expected to facilitate the deployment of a robust green hydrogen ecosystem, driving innovation, investment, and economic growth. By promoting renewable energy sources and green hydrogen, the mission will create new opportunities across various sectors, including transportation, industry, and energy storage.
When investing in green hydrogen fuel stocks, consider the following factors:
Look for companies with a strong focus on green energy and sustainability.
Companies investing in advanced green hydrogen technologies are likely to have a competitive edge.
Favor companies that benefit from government incentives and policies promoting green hydrogen.
Ensure the company has a solid financial foundation to support its green hydrogen initiatives.
Pros | Cons |
Environmental benefits: Green hydrogen is a clean energy source, contributing to reduced carbon emissions. | High initial costs: Green hydrogen production requires significant investment in technology and infrastructure. |
Growing market: The demand for green hydrogen is expected to increase, driven by global sustainability goals. | Market volatility: The green hydrogen market is still emerging, and stocks may experience high volatility. |
Government incentives: Supportive policies and incentives can boost the growth of green hydrogen companies. | Technological challenges: Advancements in green hydrogen technology are still ongoing, and there may be unforeseen challenges. |
When selecting green hydrogen fuel stocks, consider the following tips:
Look into the company's projects, partnerships, and investments in green hydrogen.
Review the company's financial statements to ensure it has the resources to support its green hydrogen ambitions.
Consider the company's market share and competitive position in the green hydrogen industry.
Stay updated on government policies and incentives that may impact the green hydrogen sector.
Investing in green hydrogen stocks in India offers an opportunity to be part of the green energy revolution. The companies listed above are at the forefront of the green hydrogen movement and are well-positioned to benefit from the growing demand for sustainable energy solutions. As always, conduct thorough research and consider your investment goals before making any decisions.
Green hydrogen stocks refer to shares of companies involved in the production, development, and utilization of green hydrogen as a clean energy source.
Green hydrogen is considered a good investment due to the increasing demand for clean energy, supportive government policies, and the potential for significant environmental benefits.
You can invest in green hydrogen stocks in India through stock exchanges by purchasing shares of companies involved in the green hydrogen sector. Consider consulting with a financial advisor to make informed investment decisions.
The top green hydrogen stocks to buy in India for 2024 include Reliance Industries, JSW Energy, Larsen & Toubro, Adani Green Energy Ltd, NTPC, Indian Oil Corporation, and Bharat Petroleum Corporation.
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