What are Green Hydrogen Stocks in India?
According to researchers, energy use has doubled in the last 20 years and is likely to grow by at least another 25% by 2030. Yes, you read that right. As a result, many countries are investing rapidly in renewable energy resources, and green hydrogen is one of them. Therefore, green hydrogen stocks and green hydrogen manufacturers in India are gaining popularity. Along with stocks of companies involved in producing, storing, and distributing green hydrogen have become increasingly popular among investors.
In this blog, we are discussing popular green hydrogen stocks and how they can be a potential investment. So, read on to learn more about the same.
What are Green Hydrogen Stocks?
A green hydrogen is a form of renewable energy. It is formed when water (H₂O) molecules are split into two chemical components: Hydrogen (H2) and Oxygen (O2). Thus, when we talk about green hydrogen, we mean hydrogen obtained without emitting pollution, i.e. sustainable hydrogen. A fuel already being hailed as the key to global decarbonisation and fulfilling climate change commitments by 2050.
Coming back to the question, green hydrogen stocks in the stock market refer to the stock of companies involved in producing, storing, and distributing green hydrogen. These companies use wind or solar power to power the electrolysis process for green hydrogen production. Therefore, the green hydrogen stock price is expected to grow rapidly in the coming years, with the global green hydrogen market projected to reach $11.7 billion by 2026.
Top Green Hydrogen Companies in India
Thus, let’s look at the popular green hydrogen companies in India that have been promising investments for many years.
|
S.No. | Company name | Sub-sector | Market cap | 5-year return on investment |
|
1. | Oil & Gas – Refining | 15,03,320.74 | 7.29 | |
|
2. | Oil & Gas – Exploration | 1,96,000.75 | 8.49 | |
|
3. | Power Generation | 1,74,249.09 | 6.74 | |
|
4. | Power Transmission & Distribution | 1,57,714.99 | 9.68 | |
|
5. | Renewable Energy | 1,13,543.45 | 5.62 | |
|
6. | Oil & Gas – Refining | 1,09,863.23 | 9.76 | |
|
7. |
Gas Distribution |
1,09,656.56 |
19.23 | |
|
8. |
Power Infrastructure |
1,05,932.76 |
9.15 | |
|
9. | Power Generation | 82,962.76 |
8.59 | |
|
10. | Gas Distribution | 72,457.60 | 13.93 |
Factors to Consider Before Investing in Green Hydrogen Companies in India.
Investing in green hydrogen companies in India or green energy stocks can be a promising opportunity for investors looking to capitalize on the growth potential of the clean energy industry. Here are some of the most important factors to keep in mind:
- Government Policies and Regulations: Green hydrogen production and usage in India is still in its early stages. Thus, investors should monitor government policies related to renewable energy, and the potential incentives, and subsidies available to green hydrogen companies.
- Market Demand and Growth Potential: The market demand for green hydrogen shares and its growth potential are important factors. Thus, investors should research the potential demand for green hydrogen stocks and evaluate the long-term prospects of green hydrogen companies in India.
- Financial Performance: Evaluating the financial performance of green hydrogen companies in India is crucial before investing. Thus, investors should review the company’s financial statements, including revenue growth, profit margins, and cash flow to make an informed decision.
- A Viable Alternative Energy Source: Investing in green hydrogen companies in India is driven by the desire to impact the environment positively. Hence, investors should evaluate the environmental impact of the green hydrogen companies they are considering.
National Green Hydrogen Mission – 2023
As India’s growth story unfolds, its demand for energy and resources is set to rise. With a goal to become energy independent by 2047 and achieve Net Zero emissions by 2070, the National Green Hydrogen Mission will be acting as a catalyst for new opportunities.
In India, the National Green Hydrogen Mission promotes the development and use of green hydrogen. Furthermore, as a part of the National Budget 2023, India’s National Green Hydrogen Mission has received INR 19,700 crore to promote the use of hydrogen as a clean and renewable energy source.
Additionally, the main objective is to increase hydrogen production and reduce dependence on fossil fuels. Therefore, to achieve this, the mission promotes the development of technologies that produce hydrogen, such as hydrolysis, steam methane reforming, and biomass gasification.
Hence, the Mission is expected to facilitate the deployment of the Green Hydrogen ecosystem and renewable energy by creating opportunities for innovation, investments and economic growth.
What are the Advantages of Adding Green Stocks to Your smallcase Portfolio?
Thus, there are several advantages to adding green hydrogen stocks to your portfolio or you can simply do portfolio investing on smallcase platform. Now, let’s have a look at the benefits:
- Growth Potential: The demand for clean energy is increasing as more countries and businesses commit to reducing their carbon footprint. As a result, the demand for green hydrogen stocks is expected to grow rapidly in the coming years, which could lead to significant opportunities.
- Diversification: Adding green hydrogen stocks to your portfolio can help diversify your investments, which can help reduce risk. This is because green hydrogen investments are likely less correlated with other assets in your portfolio, such as stocks or bonds.
- Environmental benefits: Green hydrogen stocks support transitioning to a more sustainable and environmentally friendly energy system. Thus, by investing in companies that produce or use green hydrogen, you are contributing to the development of a low-carbon economy.
- Innovation and technological advancements: Investing in green hydrogen stocks can support the development of new technologies and innovations in the energy sector. Hence, this can lead to new investment opportunities as companies develop and commercialize new products and services.
What are the Challenges Ahead?
The adoption of green hydrogen faces several challenges, which can be viewed as opportunities for innovation and growth in the industry.
- High Costs: For some, the production of green hydrogen can be viewed as expensive due to the technology used in the electrolysis process. However, with increased demand and technological advancements in the industry, there will be cost reductions with increased efficiency.
- Limited Infrastructure: The infrastructure for storing, transporting, and distributing green hydrogen is not yet well-developed. However, it is an opportunity for companies to invest in new infrastructure (such as pipelines and storage facilities), creating new jobs, and economic growth.
- Competition from Fossil Fuels: Though fossil fuels remain cheaper than green hydrogen, they are harmful in the long run. Thus, increasing awareness about the environmental impacts of fossil fuels presents an opportunity for green hydrogen to become a more competitive option in the long run.
- Regulation and Policy: Regulations and policies surrounding the production and use of green hydrogen are still in their early stages. However, this presents an opportunity for policymakers to work collaboratively with industry leaders to incentivize the growth of the green hydrogen industry.
To conclude, green hydrogen is gaining attention as a clean energy source that can contribute to a sustainable future. Therefore, governments worldwide are prioritizing decarbonization and renewable energy, resulting in the rise of green hydrogen share prices. Thus, by investing in green hydrogen stocks at smallcase, individuals can benefit from potential financial gains and contribute to a cleaner and more sustainable future.
Go green with smallcase today!
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