Shares of state-run oil company Indian Oil Corporation (IOC) and engineering and construction major Larsen & Toubro (L&T) rose nearly 1% in early trade on Monday, in line with broader markets. Both the shares gained after they unveiled a plan to form a joint venture for the development of a green hydrogen business in collaboration with Nasdaq-listed ReNew Power, India’s leading renewable energy company.

While L&T shares climbed as much as 1.4% to hit an intraday high of ₹1,816, IOC stock price rose as much as 0.7% to ₹122.95 apiece on the BSE. Meanwhile, the BSE Sensex was quoting at 60,411, up 1,134 points, or 1.91%.

The companies in a joint statement said that Indian Oil, L&T and ReNew will form a joint venture (JV) to develop the nascent green hydrogen sector in India. All three companies will hold an equal stake in the proposed green hydrogen JV.

Besides, Indian Oil and L&T have signed a binding term sheet to form a JV with equity participation to manufacture and sell electrolysers used in the production of green hydrogen.

“In a bid to enable India’s decarbonisation push, Indian Oil Corporation Ltd., the country’s top refiner and fuel retailer, Larsen & Toubro (L&T), India’s premier engineering, construction and IT/TS services conglomerate, and ReNew Power, India’s leading renewable energy company, announced signing of binding term sheet for the formation of a joint venture (JV) company to develop the nascent green hydrogen sector in India,” the joint statement read.

The release further stated that the tripartite venture is a synergistic alliance that brings together the strong credentials of L&T in designing, executing, and delivering EPC projects, Indian Oil's established expertise in petroleum refining along with its presence across the energy spectrum, and the expertise of ReNew in offering and developing utility-scale renewable energy solutions.

Commenting on the development, SN Subrahmanyan, CEO & MD, L&T, said, “India plans to rapidly march ahead in its decarbonisation efforts and production of green hydrogen is key in this endeavour. The IndianOil-L&T-ReNew JV will focus on developing green hydrogen projects in a time-bound manner to supply green hydrogen at an industrial scale.”

“Both these JVs aim to enable the nation’s ‘Aatmanirbhar Bharat’ mission to rapidly build, expand and bring in economies of scale to make green hydrogen a cost-effective energy carrier and a chemical feedstock for many sectors,” he added.

Speaking on the occasion, Shrikant Madhav Vaidya, chairman, Indian Oil, said, “To start with, this partnership will focus on green hydrogen projects at our Mathura and Panipat refineries. Alongside, other green hydrogen projects in India will also be evaluated. While the usage of hydrogen in the mobility sector will take its due time, however the refineries will be the pivot around which India’s green hydrogen revolution will materialise in a substantial way.”

The planned JVs aim to enable India’s transition from a grey hydrogen economy to a greener economy that increasingly manufactures hydrogen via electrolysis powered by renewable energy. The central government in February notified the green hydrogen policy aimed at boosting production of green hydrogen and green ammonia to help the nation become a global hub for the environmentally friendly version of the element.

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