Inox Air plans to tap markets for green hydrogen business

Siddharth Jain, managing director, Inox Air.
Siddharth Jain, managing director, Inox Air.


India has announced a National Green Hydrogen Mission to create 5 million tonnes of capacity by 2030

Inox Air Products Ltd, India’s largest manufacturer of industrial and medical gases, plans to tap the equity market to finance an expansion into green hydrogen, a top executive said.

“Currently, there is no need... However, when we enter the hydrogen-producing business, that would require us to raise money, since the segment is capital-intensive. It could require an investment of up to 10,000 crore and we would surely look at tapping the equity market to raise money," Siddharth Jain, managing director, Inox Air said in an interview.

India has announced a National Green Hydrogen Mission to create 5 million tonnes of capacity by 2030, as it aims to become a world leader in green hydrogen.

Inox Air plans to invest 3,000 crore across its nine sites in the next two to three years, most of it in the first two years.

Of the total amount, 1,300 crore will go into air separation units at Tata Steel’s Meramandali plant in Odisha. The rest will be invested in eight other projects, including one for Arcelor Mittal.

“The Tata Steel investment will be the single largest that Inox will make in one project. The company plans to fund it through a combination of internal accruals and debt," said Jain.

The company has kicked off a decarbonization plan, beginning with commissioning solar plants.

“We are investing heavily in our goal to decarbonize ourselves. We are moving to green energy. We are going to be investing heavily in wind and solar energy. We just commissioned—a few weeks back - a 21 MW solar plant in Uttar Pradesh and have signed a long-term agreement with Tata Solar for 40 MW capacity here in Maharashtra," Jain said. Inox Air has enough cash available to finance these initiatives, Jain added.

The Inox Group, which entered the cinema exhibition business 21 years ago upon advice from McKinsey, does not plan to venture into any new segment, for the time being.

“That decision has resulted, through our alliance with PVR, in the creation of a company that is world’s fifth largest in cinema exhibition. However, there are no plans to enter in a new business segment since my hands are full (with all these expansion plans)," Jain said.

Jain also said that the high-cost environment in terms of input costs has started to stabilize, and efficiencies in the system will also bring benefits.

“I feel our suppliers are getting more productive and there will be productivity gains. I must admit, we are seeing things settle down domestically, whether you take stainless steel, carbon steel... We are in a much better position as compared to the world," he added.

India’s annual wholesale price index (WPI), announced on Monday, fell for the first time in nearly three years in April, as prices softened across the board. Data released on Friday showed India’s annual retail inflation eased to an 18-month low in April.

The decline in inflation is set to give India’s central bank room to reduce interest rates, thus, help reduce cost of capital for companies like INOX and spur growth.

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