Stocks Likely to Benefit from India’s PNG Expansion and Green Hydrogen Blending

Synopsis: India’s push to expand PNG infrastructure and blend green hydrogen signals a structural shift in energy. Supported by policy incentives and cost advantages, it creates long-term demand for gas and hydrogen players. Companies across production, transmission, and distribution stand to benefit, with early movers likely gaining the most from this transition.

India is stepping up the shift towards cleaner sources of energy by investing in PNG infrastructure and launching green hydrogen blending. This strategy has been adopted to cut down on imports and ensure energy security in the country, which has been affected by disruptions in the global market. This project is expected to boost growth in the gas and hydrogen chain, driven by supportive policies and favourable cost dynamics.

Policy push and structural demand tailwinds

India’s policy push to expand the PNG infrastructure alongside the blending of green hydrogen is well timed as the world is witnessing disruptions in the energy supply chain. This is not an India-specific short-term policy move but rather a structural change aimed at reducing import dependence while ensuring energy security.

The policy approval to blend 5% hydrogen, which can be taken to 20%, is a gradual move towards the energy transition. This is an assured demand story for companies involved in the gas distribution segment as well as those in the hydrogen space.

The Rs 19,744 crore National Green Hydrogen Mission, aiming to produce 5 MMT by 2030, is an added incentive for the space. This is important as the hydrogen ecosystem is still in the early stages.

India is also gaining cost advantages as the prices of green ammonia were discovered to be between Rs 49.75 and Rs 64.74/kg compared to Rs 110/kg globally. This is an indicator that India is poised to become the cost leader in the adoption of the fuel in sectors such as fertilisers, refineries, and chemicals.

Key beneficiaries in the entire value chain

One of the biggest beneficiaries will be NTPC Limited, as it is already executing projects related to hydrogen blending. It will enjoy the advantage of being the early mover in the market. Another major player, GAIL (India) Limited, will also gain through the increase in gas transmission volumes and the requirement to upgrade infrastructure to facilitate hydrogen blending.

City gas distribution companies like Gujarat Gas Limited will also be important in implementing the blending at the consumer level, making them direct beneficiaries of the expansion in PNG. 

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Stocks Likely to Benefit from India’s PNG Expansion and Green Hydrogen Blending appeared first on Trade Brains.