Domestic brokerage firm Nuvama Institutional Equities continue to remain positive on Waaree Energies and Reliance Industries (RIL) in the green Hydrogen (GH2) spectrum. The schemes announced for electrolysers and GH2 production are likely to drive down GH2 cost, making it viable for use.
Solar Energy Corporation of India (SECI) recently issued a letter of award (LoAs) to winners for GH2 production tenders for 450tpa GH2 manufacturing capacities under the SIGHT programme in Mode-1 Tranche-II of the National GH2 Mission. Waaree, L&T, Green Infra and AM Green were the biggest gainers, each winning 90,000tpa of GH2 manufacturing capacity—followed by RIL (49,000tpa).
However, the average incentive amount is less than Tranche-I at Rs 17/kg ($0.18/kg) forming 5 per cent of current estimated GH2 cost versus Rs 27/kg ($0.32/kg) forming 10 per cent of estimated GH2 cost. The incentive awarded to RIL and Waaree stands at Rs 25/kg ($0.28/kg) and Rs 19/kg ($0.21/kg), higher than the average incentive, said Nuvama.
Across both tranches, RIL has been awarded the highest capacity at 139,000tpa followed by a host of companies at 90,000tpa, which includes Waaree. The tender outlines a commissioning period of 36 months for capacities awarded to the winners. The Adani group has not bid for GH2 but has won 300MW of electrolyser capacity, Nuvama noted.
"The government has approved an outlay of Rs 19,700 crore for the Hydrogen Mission 2030 including Rs 13,100 crore for incentives pertaining to GH2 production and Rs 4,500 crore for electrolyser manufacturing, attracting investments of Rs 8 lakh crore under the mission," it said.
"RIL is one of the world’s largest producers and consumers of grey H2, transition to GH2 shall enable it to improve margins in future. Waaree’s foray into production of GH2, electrolysers, advanced li-ion cells, inverters and BESS shall tie up multi-decadal growth and enable it to become horizontally and vertically integrated, Nuvama added. It has 'buy' ratings on Reliance Industries and Waaree Energies with a target price of Rs 1673 and Rs 2,805, respectively.
