Top 4 Beneficiaries of SECI's Electrolyser Auction

Green hydrogen has been labelled as one of the cleanest forms of energy in the world and is being looked at as the ultimate solution to achieve net zero emissions.

With electrolysers at the core of the green hydrogen value chain, the rising popularity of clean fuel globally translates to a promising and sizeable opportunity for indigenous manufacturers of electrolysers.

In January 2023, the Government of India approved India's National Green Hydrogen Mission which targets green hydrogen production of 5 MT per year by 2030 with an initial outlay of US$ 2.5 billion (bn).

India's green hydrogen electrolyser market is poised for significant growth, with a projected compounded annual growth rate (CAGR) of 16%, escalating from US$ 4 bn in 2030 to US$ 78 bn by 2050.

The Solar Energy Corporation of India (SECI), in March 2024, issued a tender for the development of 1.5 GW electrolyser production capacity as part of the strategic interventions for the green hydrogen transition scheme, Tranche II.

The overall capacity was divided into separate buckets. In bucket 1, an electrolyser manufacturing capacity of 1,100 MW was tendered in which any stack technology could be manufactured.

The allocation in bucket 2A was 300 MW, requiring domestically developed stack technology. For bucket 2B, the 100 MW capacity for electrolyser manufacturing was tendered for smaller units of domestically developed stack technology.

SECI will likely auction up to 20 GW of such capacity in the ongoing financial year, around 5 GW higher than last year, as the government fastens toward achieving 500 GW of renewable energy capacity by 2030.

In this article, we discuss the 4 beneficiaries of the SECI's electrolyser auction.

#1 Adani Enterprises

Adani Enterprises Ltd has business interests in various economic areas such as mining, integrated resources management (IRM), infrastructure such as airports, roads, rail/ metro, water, data centers, solar manufacturing, agro, and defence.

Incorporated in 1993, Adani Enterprise Ltd. (AEL) is the flagship company of the Adani group and acts as the group's incubator for new businesses.

On a standalone basis, AEL earns major revenue from IRM and mining services.

On a consolidated basis, other segments such as integrated solar PV cell & module manufacturing and airports, are the main contributors of the revenue apart from shipping, bunkering, and agri-storage, which are smaller contributors to AEL's overall revenue and profitability.

Adani Solar is the largest integrated solar manufacturer in India. It has a manufacturing facility of 1.5 GW capacity along with research and development (R&D) facilities within an electronic manufacturing cluster (EMC) facility located in the Mundra Special Economic Zone (SEZ).

Adani Solar's manufacturing facility with multi-level infrastructure will be optimised for scaling up to 3.5 GW of modules and cells under a single roof.

Adani Enterprises' subsidiary has secured a contract from Solar Energy Corporation of India (SECI) to build an electrolyzer manufacturing capacity under the production-linked incentive (PLI) scheme for green hydrogen.The company's arm will be responsible for setting up an annual capacity of 198.5 MW under the strategic interventions for the green hydrogen transition (SIGHT) scheme.

AEL posted a 115.8% year-on-year (YoY) jump in its first quarter consolidated profit for the first quarter of FY25. During the quarter under review, profit came at Rs 14.5 bn compared to Rs 6.7 bn in the year-ago period.

Revenue from the operation of the flagship Adani Group firm stood at Rs 254.7 bn in the first quarter of FY25, an increase of 10.6% from Rs 230.1 bn in the corresponding period last year.

#2 Gensol Engineering

Gensol Engineering Ltd is engaged in the business of solar consulting & EPC.

The company in March 2023, fully acquired Scorpius Trackers Pvt Ltd for 1.35 bn, which is a solar trackers-specialist in India. Gensol Engineering is renowned for its expertise in solar EPC and O&M services.

In FY23, Gensol won the bid for the development of 30 MWac floating solar projects with a value of Rs 2.3 bn. It also received purchase orders from reputed clients for the development of solar power projects with a total capacity of over 247 MWp valued at 5 bn.

The company targets to reach a revenue of Rs 20.3 bn by FY25. For FY25, the EPC business is expected to add Rs 9.8 bn in revenue, the leasing business to Rs 3.7 bn, and the EV manufacturing business to add Rs 6.6 bn.

Gensol has emerged as the winning bidder for 116 MW (150 MWp) of solar projects in Gujarat with approximately engineering, procurement, and construction (EPC) revenue of Rs 6 bn.

Matrix is another company backed by Anmol Singh Jaggi and Puneet Singh Jaggi, founders of the Gensol Group.

Matrix holds a prominent position in India's energy sector, specialising in sourcing and marketing natural gas and Regasified Liquefied Natural Gas (R-LNG). Matrix Gas benefits from a strong foundation in renewable energy and electric mobility sectors.

Matrix has won a project for setting up a hydrogen electrolyser under the government's SIGHT, a production-linked incentive scheme that is part of the National Green Hydrogen Mission.

Gensol is expanding its presence in current and new business segments like solar, BESS (battery energy storage systems) & EV leasing, which are poised for significant growth in the near future, boosting the overall profitability.

It recently bagged a Rs 4.6 bn solar plant project at Gujarat's Khavda RE Power Park.

It's a leading player in the renewable energy sector, specialising in solar power EPC services, along with electric mobility solutions.

The company's total revenue jumped by 105% to Rs 2.9 bn in the first quarter of FY25 from Rs 1.4 bn in the first quarter of FY24.

The company's earnings before interest tax depreciation amortisation (EBITDA) climbed by 143% to Rs 0.8 bn in the first quarter of FY25 from Rs 0.3 bn in the first quarter of FY24.

#3 Advait Infratech

Advait Infratech Ltd is engaged in the business of providing products and solutions for power transmission, power substation, and telecommunication infrastructure fields.

It operates with various verticals such as turnkey telecommunication projects, installation of power transmission, and telecom products.

Advait plans to expand its electrolyser manufacturing capacity to 200 MW per year by 2025.

The company ventured into green energy in 2023, by forming a special-purpose vehicle, Greenergy, focusing on electrolyser assembly and manufacturing for hydrogen production, fuel cell supply, and sustainable services like carbon consultancy.

Currently, its electrolyzer manufacturing plant, located in Kadi, Gujarat, has a capacity of 120 MW /year. It produces 0.3/0.5/1 MW electrolysis cell stacks and 2/4/8 MW modules.

Advait announced that its arm Advait Greenergy has received letters of intent from KP group of companies for solar and green hydrogen projects aggregating to Rs 0.7 bn.

Advait has also formed a wholly-owned subsidiary, Advait Energy Holding AS, in Norway.

This company will engage in strategic collaboration and investments, services, marketing, manufacturing, and exchanging technical know-how in the space of the green hydrogen ecosystem.

The company announced that it has received an order worth Rs 2.9 bn from the SECI.

The project involves setting up manufacturing capacities of 200 MW of Alkaline Electrolysers in India under the SIGHT scheme (Tranche - II). The contract is to be executed within 5 years.

Earlier, in a major boost Advait signed two MoUs with the state government of Gujarat, pledging Rs 0.4 bn for establishing a fuel cell/electrolyzer plant and an emergency restoration system in Kadi.

The company's consolidated net profit surged to Rs 54.6 million (m) in the first quarter of FY25 as against Rs 14.7 m during the same quarter the previous year. Sales rose 117.8% to Rs 598.1 m in the first quarter of FY25 over the first quarter of FY24.

#4 Waaree Renewable Technologies

Incorporated in 1999, Waaree Renewables Technologies Ltd is engaged in the business of generation of power through renewable energy sources and also provides consultancy services in this regard.

Waaree Energy is one of the largest vertically integrated new energy companies. It has India's largest solar panel manufacturing capacity of 12GW at its plants in Chikhli, Surat, and Umbergaon in Gujarat.

The company is a subsidiary company of Waaree group and is spearheading the group's solar EPC business.

The company provides end-to-end EPC solutions, financing, constructing, owning, and operating solar projects. It provides clean energy to its clients by setting up both on-site solar projects (rooftop and ground-mounted) and off-site solar farms (open-access solar plants).

As of the first quarter of FY25, the company has an unexecuted order book of 2,191 MWp to be executed between 9-12 months compared to 817 MW as of FY23. It has a bidding pipeline of 15.5 GW.

The company also won a contract to set up a 1 MWp green hydrogen plant integrated with the ecosystem.

The company plans to execute projects between 1.8 to 2 GW in FY25, which can result in a doubling of revenues over Rs 25 to 28 bn.

Waaree Renewable Technologies has received a Rs 0.9 bn solar power project to be developed on a turnkey basis. The project is scheduled to be completed in ongoing financial year 2024-25.

WRTL has reported a three-fold rise in consolidated net profit at Rs 281.6 m for the first quarter of FY25.

It logged a Rs 91.3 m net profit during the first quarter of FY24.

Total revenue increased to Rs 2.3 bn from Rs 1.2 bn in the same quarter a year ago.

Conclusion

India has a unique opportunity to become a global hydrogen electrolyzer manufacturing hub.

A few steps by the union government could boost the green hydrogen market in India.

Akin to incentives that were announced for solar modules and storage, a favorable PLI policy for electrolysers would boost players to gain scale and achieve overall cost competitiveness for green hydrogen.

While US and European markets will spearhead the overall demand for green hydrogen, it will be equally important to create a local demand for green hydrogen.

Investors should keep a close watch on this space for potential multibagger opportunities.

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