Best Green Hydrogen Stocks in India (2024)

Last Updated on Jan 30, 2024 by Anjali Chourasiya

India has set its sights on becoming energy-independent by 2047 and achieving Net Zero by 2070. To achieve these ambitious goals, the country is increasingly turning to green hydrogen energy. This clean, sustainable fuel source is poised to play a pivotal role in India’s energy landscape. In this blog, we’ll delve into the world of green hydrogen and explore why investing in green hydrogen stocks is not just a financial opportunity but also a way to support India’s journey toward a greener and more sustainable future. 

In this article, let’s explore the best green hydrogen stocks in India, factors to consider before investing, challenges in the industry, how to invest in green hydrogen companies in India, and more.

Understanding Green Hydrogen

What is green hydrogen?

Green hydrogen, produced through the electrolysis of water using renewable energy sources like solar or wind power, is distinct in terms of minimal environmental footprint. Being produced through the electrolysis of water using renewable energy sources like solar or wind power, green hydrogen distinguishes itself in terms of minimum environmental footprint. The clean energy carrier stands indispensable in places where electrification is difficult and thus forms a cornerstone in India’s energy transition. 


The environmental impact of green hydrogen

Green hydrogen will considerably reduce carbon emissions that emanate from the heavy industrial sectors and the transportation sector. It gives a fossil-based fuel alternative that will help humankind globally with the reduction of their carbon footprint upon adherence to those sustainable development objectives.

Best green hydrogen stocks in India 2024

Name Sub-Sector Market Cap (Rs. in cr.) Close Price (Rs.) PE Ratio 1Y Return (%) 5Y Return on Investment (%) Dividend Yield (%) Fundamental Score
Oil and Natural Gas Corporation Ltd Oil & Gas – Exploration & Production 2,94,441.43 252.50 8.31 74.26 8.78 4.81 10.00
Reliance Industries Ltd Oil & Gas – Refining & Marketing 18,30,896.31 2,896.10 27.45 35.19 7.00 0.33 7.71
Bharat Petroleum Corporation Ltd Oil & Gas – Refining & Marketing 1,02,585.01 492.65 48.14 47.02 10.05 0.83 5.65
Indian Oil Corporation Ltd Oil & Gas – Refining & Marketing 2,02,922.20 146.70 20.72 79.45 8.17 2.04 5.57
Jindal Stainless Ltd Iron & Steel 44,329.60 553.00 20.96 117.67 14.99 0.46 5.45
JSW Energy Ltd Power Generation 80,032.37 496.30 54.16 116.21 8.13 0.41 5.44
NTPC Ltd Power Generation 3,05,202.57 324.55 18.05 92.21 6.98 2.30 5.11
Adani Green Energy Ltd Renewable Energy 2,63,709.73 1,715.50 270.75 44.28 6.15 4.83
GAIL (India) Ltd Gas Distribution 1,08,752.15 171.75 19.36 80.88 13.13 3.02 4.25
Larsen & Toubro Ltd Construction & Engineering 4,93,937.06 3,708.00 47.17 75.49 9.24 0.68 4.17

Note: The stocks are sorted using the Fundamental Score (high to low) on the Tickertape Stock Screener, and the data is from 29th January 2024.

Fundamental score: It is a smallcase proprietary score between 1 and 10 assigned to stocks listed on the NSE. The score helps rank the stock over other stocks in the respective sector. The higher the score, the better the company. The score is calculated considering factors like valuation, profitability, market share growth, financial health and earnings growth of the company.


Details of top green hydrogen companies in India

The details of investments by the top 3 green hydrogen companies based on Fundamental Score are mentioned below.

Oil and Natural Gas Corporation Ltd

Maharatna ONGC is India’s largest crude oil and natural gas Company, contributing around 71% to Indian domestic production. The company plans to invest around Rs. 800bn-850bn ($9.6bn-10.2bn) to develop a green ammonia production capacity of two million tonnes annually by 2035. This includes two projects, each aiming to produce one million tonnes per year, collaborating with partners like Greenko. These projects, part of a larger plan to establish green hydrogen and ammonia plants by 2027, require an estimated 4.5-5 GW of power for each project. ONGC’s broader strategy involves a Rs. 1 tn investment to set up 10 GW of renewable energy assets by 2030, focusing on wind, solar, and other renewable sources.

In 2022, the company and its partners decided to invest $6.2 bn (Rs. 50,000 cr.) in green energy projects to produce carbon-free hydrogen and green ammonia as part of an ambitious decarbonisation drive.

For this purpose, they collaborated with Greenko, one of India’s largest renewable energy companies. They formed a 50:50 joint venture for green energy projects. Further, ONGC is investing Rs. 1 lakh cr. in low-carbon energy opportunities, including renewables and green hydrogen, by the end of this decade. The company has stated that it has detailed a “roadmap to scale up its low-carbon energy portfolio significantly”.

Reliance Industries Ltd

Chairman and Managing Director of Reliance Industries Ltd, Mukesh Ambani, said in the Annual General Meeting of 2022 that RIL is mapping its way to transition from the production of grey hydrogen to the production of green hydrogen by 2025. In continuation with this, the company introduced India’s first-ever hydrogen-run truck, developed in partnership with Ashok Leyland.

“The hydrogen internal combustion engine (H2-ICE)…will emit near zero emissions, deliver performance on par with conventional diesel trucks…reduce noise, and with projected reductions in operating costs, thus, redefining the future of green mobility,” RIL said in a press statement.

Further, RIL plans to produce green hydrogen at $1 per kg by 2030. Currently, it costs $8-9 per kg, which is more expensive than traditional fuels. The company is also investing $10 billion to build a new energy ecosystem with green hydrogen. They have partnered with Olectra Greentech and Bharat Benz to develop hydrogen buses and coaches. These vehicles have a travel range of 400 km and can be refuelled in 15 minutes.

RIL has committed to $10 billion of investment over three years in the new energy business and becoming net carbon zero by 2035. The oil-to-retail giant aims to provide affordable green hydrogen as a viable alternative to traditional fuels. In an announcement at the Tamil Nadu Global Investor Meet (GIM) in early January 2024, Mukesh Ambani will be making new investments in renewable energy and green hydrogen areas in Tamil Nadu. 

Bharat Petroleum Corporation Ltd (BPCL)

In 2021, BPCL collaborated with Bhabha Atomic Research Centre (BARC) to scale up Alkaline Electrolyser technology for Green Hydrogen production. BPCL is expected to rise to 1,000 MW by 2027 using only renewable sources, including green hydrogen. 

Furthermore, BPCL is setting up a 20-megawatt green hydrogen unit in Madhya Pradesh, the largest in India so far. The company aims to do it by 2040. Further, the company plans to invest $18 billion over the next five years to grow its oil business and expand its renewable energy portfolio. They aim to have 1 GW of renewable energy capacity by 2025 and 10 GW by 2040. They will also invest in ethylene crackers, polypropylene projects, and infrastructure to sell natural gas.

Overview and future of green hydrogen energy in India

India aims to achieve carbon neutrality by 2070, but as its economy grows, its demand for energy and resources is expected to rise. Energy demand has already doubled over the past two decades, and it is projected to increase by at least 25% by 2030.

More than 40% of India’s primary energy needs, which cost over $90 bn annually, are met through imports. Furthermore, industries such as transportation and manufacturing depend heavily on the fossil fuels that are imported. Therefore, there is a need for technology that can increase the use of renewable sources in the energy mix and gradually reduce reliance on fossil fuels.

National Green Hydrogen Mission – one of the Budget 2023 – 2024 highlights. The Government of India sanctioned Rs. 19,744 cr. towards the mission and plans to increase its annual green hydrogen production to 5 mn tonnes by 2030. The Government also plans to reduce dependence on fossil fuel imports and cut greenhouse gas emissions by nearly 50 mn tonnes. The eventual goal is to turn the country into a hub for green hydrogen production to meet global renewable energy demands.

Factors to consider before investing in green hydrogen energy stocks in India

Growth prospect: The Government of India is constantly trying to save the environment by replacing fossil fuels with green energy under several missions. And green hydrogen energy is considered a viable and sustainable alternative energy resource. Moreover, in the 2023 budget, the Government announced the National Green Hydrogen Mission. All of this collectively indicates good potential in the sector for the long term.

Evergreen stocks: While the Government is putting efforts into promoting green energy, the companies that invest in green energy are evergreen. Further, there has been a proliferation of energy-efficient appliances, including solar water heaters, wind turbines, geothermal heat pump systems, hydropower, and others. Companies that manufacture such appliances are expected to remain in high demand.

ESG investing: As a result of the rising demand for sustainable living and investing, Environmental, Social, and Governance (ESG) investing is rising. Everyone always likes companies that make a conscious effort to save the environment. 

Profits are in the future: Most of the conversation around green hydrogen energy revolves around the future potential and returns of the industry. This can also indicate profits in the future. Hence, consider doing your own analysis of the green hydrogen energy industry and stocks.

Though the industry looks attractive, it is wise to make a decision while keeping in mind one’s current financial situation, future financial goals/plans, and the advice of a financial advisor.

Features of green hydrogen stocks 

Here are 5 key features of green hydrogen stocks.

  1. Renewable production methods: Green hydrogen stocks in India stand out due to their commitment to environmentally friendly production methods. They utilise electrolysis powered by renewable energy sources like solar and wind, distinguishing them from conventional hydrogen production.
  2. Carbon neutrality: A defining feature of green hydrogen stocks in India is their dedication to carbon neutrality. Companies in this sector aim to minimise or completely offset their carbon footprint, contributing to global efforts to combat climate change and making them a sustainable investment choice.
  3. Technological innovation: Green hydrogen stocks in India prioritise cutting-edge technologies. They invest in advanced electrolysis techniques, efficient storage solutions, and scalable production methods, positioning themselves at the forefront of hydrogen fuel innovation within the Indian market.
  4. Strategic partnerships: Successful players in the Indian green hydrogen sector often forge strategic partnerships with energy companies, governments, and technology providers. These collaborations enhance the scalability and viability of green hydrogen initiatives, creating opportunities for growth and profitability.
  5. Policy and regulatory environment: The regulatory landscape significantly impacts the green hydrogen energy stocks in India. Investors need to be aware of supportive policies, subsidies, and regulatory frameworks as they can influence the long-term viability and growth potential of green hydrogen-related stocks in India’s evolving energy market. Understanding the market dynamics, including supply and demand trends, competition, and pricing dynamics, is essential for making informed investment decisions in this burgeoning sector.

Benefits of investing in green hydrogen stocks

There are various advantages of investing in green hydrogen stocks. Here are 5 key benefits.

  • A greener future: By investing in green hydrogen stocks, you’re supporting a cleaner and more sustainable energy future. It’s like putting your money where your values are, helping reduce pollution and combat climate change.
  • Potential for long-term gains: Imagine planting a tree today that could grow into a thriving forest tomorrow. Investing in green hydrogen stocks offers the potential for long-term growth as the world increasingly embraces cleaner energy solutions.
  • Diversify and protect: Just like having a variety of fruits in your basket, adding green hydrogen stocks to your investment portfolio can diversify your holdings and reduce risk. It’s a way to spread your bets and increase your financial resilience.
  • Riding the energy transition wave: Picture catching a wave at the right moment. Investing in green hydrogen stocks lets you ride the wave of the global shift towards cleaner energy sources, potentially riding it to financial success.
  • Joining the clean energy movement: When you invest in green hydrogen stocks, you’re not just chasing profits; you’re participating in a movement to create a better, more sustainable world. It’s an investment that aligns with your values and contributes to a positive impact on the environment.

Challenges in the green hydrogen industry in India

  • Technological and infrastructural challenges: The real constraint on large-scale production and the distribution of green hydrogen in India is its lack of required technological advancement and infrastructure. Building up such infrastructures can create windows to help the sector flourish.
  • Economic and regulatory constraints: The second challenge arises from the overly high setup costs of the green hydrogen plants and supportive regulatory frameworks. Nonetheless, these can also be turned into opportunities if the right set of economic policies and regulatory support are put in place.

How to invest in green hydrogen stocks in India?

A diversified investment approach in the green hydrogen sector can be a wise decision. Investment in both established companies and emerging startups may prove helpful in balancing the risk-reward ratio. It would also remain a prudent step if they continuously stay vigilant about the market trends and Government policies so as to take timely decisions based on proper assessment of such information. It is always worthwhile to consult a financial advisor before making any investment decision for your portfolio.

To list the best stocks in the green hydrogen sector on Tickertape, follow the below-mentioned steps.

Step 1: Go to the Stock Screener.

Step 2: Click on ‘+ Create’ in ‘Stock Universe’.

Step 3: Add all the stocks mentioned in the articles and more which are related to the green hydrogen sector.

Step 4: Add over 200 filters to sort the stocks based on your preference.

Conclusion

The green hydrogen energy sector seems promising for the long term. However, consider the uncertainty and future promise of profits before investing in these stocks. It is always worthwhile to take the help of a financial advisor and do your own research as well. Tickertape Stock Screener can help you keep track of all the green hydrogen energy stocks. You can add all the stocks you want to track to your watchlist. Alternatively, you can add them to a ‘Stock Universe’ and keep them separate from the other stocks you track. Try it now!

FAQs about green hydrogen India

What companies make green hydrogen in India?

Here are the top 10 companies that invest in green hydrogen energy in India:

– Reliance Industries
– GAIL (India)
– National Thermal Power Corporation Limited (NTPC)
– Indian Oil Corporation
– Larsen & Toubro
– Adani Green Energy
– JSW Energy
– Jindal Stainless
– Oil & Natural Gas Corporation (ONGC)
– Bharat Petroleum Corporation

What is the best hydrogen stock to invest in?

As of 29th January 2024, the top 5 green hydrogen energy stocks based on the Fundamental score are:

– Oil and Natural Gas Corporation Ltd
– Reliance Industries Ltd
– Bharat Petroleum Corporation Ltd
– Indian Oil Corporation Ltd
– Jindal Stainless Ltd

A fundamental score is a smallcase proprietary score between 1 and 10, which is assigned to stocks listed on the NSE. The score helps rank the stock versus all other stocks in the respective sector. The higher the score, the better the company.

Who is the largest producer of green hydrogen?

According to the World Economic Forum, China consumes and produces more hydrogen than any other country – its current annual usage is more than 24 mn tonnes. More than 30 projects involving “green” hydrogen – created using emissions-free renewable energy – have been set up since 2019 in the country.

How much is the demand for green hydrogen in India?

More than 6 mn tonnes of hydrogen is used by India every year to produce ammonia and methanol for industrial purposes. It is assumed that India’s demand for hydrogen will increase five-fold, and consumption of hydrogen is expected to surge by 28 mn tonnes by 2050.

What is green hydrogen used for?

Green hydrogen is mainly used in the chemical industry for the manufacturing of ammonia and fertilisers. It is also used in the petrochemical industry for the production of petroleum products. 

How is green hydrogen made?

Hydrogen produced by splitting water by electrolysis is green hydrogen. This process only produces hydrogen and oxygen. Green hydrogen can be utilised, and the oxygen can be vented out into the atmosphere without any negative impact.

Anjali Chourasiya
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