The Indian green hydrogen solution industry has been growing rapidly in recent years with the aim of gaining energy independence by the year 2047 and net zero emissions by 2070. Central to this energy transition is the increasing use of renewable energy across all spheres of economic activity. Green hydrogen figures prominently as an alternative fuel in the Indian context. Small wonder green hydrogen stocks are attracting investor attention. Efforts by the government of India and private enterprises to popularize the use of green hydrogen solutions have given a boost to the growth of the green hydrogen industry.
Whether you are a newbie looking for some potential stocks for investment or a seasoned professional who wants to diversify your investment portfolio, you can consider investing in green hydrogen stocks. This blog post will discuss some of the best green hydrogen stocks in India that you can consider investing in. Let’s dig in.
Green hydrogen industry in India: A brief overview
Before discussing the best green hydrogen stocks in India, we will touch upon the green hydrogen industry in India. The green hydrogen industry is witnessing significant growth as the country is embracing a cleaner and greener future and gearing up for achieving energy independence. Green hydrogen is produced through a process called electrolysis. In this process, renewable energy sources (such as wind or solar power) are used to split water into hydrogen and oxygen.
As a result, green hydrogen offers clear fuel as an alternative to the fossil fuels that are responsible for pollution. Its potential to decarbonize several industries including transportation, steel production, and shipping has led to increased demand for green hydrogen solutions in India. Not only that, it can be a great backup for renewable energy sources. Additionally, green hydrogen can be used for various purposes including chemical and fertilizer production, heating buildings, and running vehicles.
With the launch of the National Green Hydrogen Mission by the government in 2022, the country has set a target of achieving annual green hydrogen production of 5MMT, along with 125 GW renewable energy production capacity by 2030. Also, the Union Budget of FY 2024-25 has allotted ₹600 crore to boost the industry. This makes green hydrogen stocks in India a popular choice for investment.
Top green hydrogen stocks in India in 2024 by market capitalization
| Green Hydrogen Stock | Market cap Rs.cr. | P/E | Div Yld % |
| Reliance Industries | 20,17,837 | 29.4 | 0.33% |
| Larsen & Toubro | 5,21,666 | 39.2 | 0.74% |
| Adani Total Gas | 88,139 | 128 | 0.03% |
| NTPC | 4,21,756 | 19.6 | 1.78 |
| Indian Oil | 2,39,778 | 7.84 | 7.01 |
| Gail (India) Ltd | 1,47,841 | 13.2 | 2.43% |
All data from Screener.in as of September 25, 2024
Investing in green hydrogen stocks begins with identifying the best hydrogen fuel stocks in India. Below, we will share a list of the best hydrogen fuel stocks as per the company market cap.
Overview of the best green hydrogen stocks in India
We have learned about the basics of the green hydrogen industry. Now, it’s time to dive deeper and learn about the best green hydrogen stocks in India in detail.
Reliance Industries
The most important name in the Indian green hydrogen industry is Reliance Industries Ltd. RIL aims to become a net-carbon zero firm by 2035 and invest nearly Rs. 750 billion in renewable energy over the next three years. If you are considering investing in the top green hydrogen stocks of India, Reliance Industries could be a good choice. It is the largest Indian green hydrogen manufacturing company. The green hydrogen produced by Reliance Industries has a wide range of applications including domestic consumption and global sales. As a result, it contributes a significant role in the reduction of carbon emissions.
Additionally, Reliance Industries utilizes wind and solar storage energy to boost large-scale green hydrogen production. The company has made a huge investment of ₹75,000 crore to increase its green hydrogen production. The company is currently setting up a green hydrogen 1GW facility in Jamnagar Gujarat to meet its target green fuel production.
Larsen & Toubro
L&T, the diversified Indian multinational, is a major technology, engineering, construction, manufacturing, and financial services company. L&T’s Green Manufacturing and Development business is at the forefront of the global shift towards a greener future. The company also aims to achieve net production of green molecules such as Green Hydrogen, Green Ammonia, and Green Methanol for offtake by energy majors in Europe, Japan, Singapore, and South Korea. Domestically, L&T has a joint venture called GH4India to cater to Indian demand.
Adani Total Gas
Adani Total Gas Limited was originally incorporated as Adani Gas Limited on 5th August, 2005 in Ahmedabad. The name was changed to Adani Total Gas in January 2021. The company has initiated efforts to reduce emissions by blending green hydrogen in Shantigram, a real estate project in Gujarat. The firm operates in the business of bio gas, bio fuel, bio mass, and hydrogen.
National Thermal Power Corporation (NTPC)
Another popular green hydrogen stock that you can consider investing in is National Thermal Power Corporation (NTPC). It is one of the leading power-generation companies in India which was established in the year 1975. NTPC made a move to establish a first-of-its-kind hydrogen refuelling station to be powered entirely by renewables in Leh. NTPC primarily generates and sells bulk power to the state power utilities. At present, it has an annual capacity of producing green hydrogen of 75,000 MW+. NTPC installed capacity involves 27 coal-dependent stations, 15 solar PV projects, 7 gas-based stations, 1 hydro and 1 small hydro station.
Indian Oil
Oil PSU Indian Oil is at the forefront of the green hydrogen revolution. The company is planning to set up India’s first green hydrogen unit for its Mathura refinery, which will be used to process crude oil.
GAIL (India)
The Ministry of Petroleum & Natural Gas (MoP&NG) formed GAIL (India) in 1984 as a Central PSU (Public Sector Undertaking). GAIL (India) operates in a number of segments which include LPG and liquid hydrocarbons, natural gas marketing, transmission services, petrochemicals and others. LPG (Liquid Petroleum Gas) and natural gas come under the segment of transmission services of GAIL (India) Limited.
Other important segments of GAIL (India) are City Gas Distribution (CGD), GAIL Tel, exploration and production (E&P) and power generation. GAIL (India) Limited also produces liquid hydrocarbons, liquid petroleum gas (LPG) and petrochemicals. It sources and trades natural gas and engages in the transmission of LPG and natural gas through pipelines. It has also expanded its presence in wind, solar, biofuel, and other such renewable energy.
Factors to consider before investing in green hydrogen stocks in India
The popularity of green hydrogen stocks in India is rising, thanks to its potential for growth in the near future. Many Indian investors are investing in these stocks to gain attractive returns. Here are some factors that one should consider before investing in green hydrogen fuel assets in India.
Government policies and incentives
One should keep tabs on government policies related to renewable energy such as National Green Hydrogen Mission. One should also review potential subsidies and incentives provided to green hydrogen companies. Understanding these factors is crucial to make an informed investment decision.
Technological advancement
The green hydrogen fuel industry largely depends on technological innovations. Established green hydrogen companies typically spend on smart storage solutions, scalable production methods, cutting-edge electrolysis techniques, and other such technological advancements. This reflects their commitment to ensure progress within the sector. Always invest in a green hydrogen fuel company that is dedicated to technological advancement.
Market demand and growth potential
Analyzing market demand for green hydrogen and the growth potential of the industry is crucial before investing in green hydrogen assets in India. One should conduct proper research to understand the market demand for green hydrogen fuel in India.
Financial performance
Whether you want to invest in a green hydrogen company for the short- or long-term, you must be well aware of its financial health. An investor must analyze a company’s financial health by examining its cash flow, profit margin, and revenue growth to make an informed decision.
Should you invest in green hydrogen stocks?
The green hydrogen fuel industry is quite new in India and if you want to invest in green hydrogen fuel assets, you must have a clear idea about the industry’s potential for growth and possible challenges. The most important challenge to the green hydrogen industry in India is high costs related to the production of green hydrogen fuel because of the electrolysis technology. However, experts suggest that the growing demand for green hydrogen fuel and technological advancement in the field will bring down production costs over time.
Another challenge is the underdeveloped infrastructure for storage, transportation, and distribution of green hydrogen fuel in India. However, this gap offers higher opportunities for investment in the industry. This will lead to economic growth and job creation, boosting industry growth. Also, increasing environmental awareness will boost market demand for green hydrogen fuel, helping the industry withstand competition from cheaper alternatives such as fossil fuels.
Thus, it is crucial to conduct research, observe and analyze market trends and industry developments when considering investing in green hydrogen stocks.
Conclusion
Green hydrogen stocks have attracted investor attention in recent years, thanks to the government’s relentless efforts to embrace a cleaner and greener future with green hydrogen solutions. Green hydrogen shares offer an opportunity for investors who want to re-align their investment portfolio with eco-friendly investments.
