Adani’s Calling Off Public Offer: A Big Setback for India’s Green Hydrogen Projects

Private sector investments in projects like what Adani group has announced have to happen in a big way if India is to attain the target of 5 trillion dollar economy in the coming years.

by N. S. Venkataraman

All those who are keen that India should successfully set up massive green hydrogen projects to overcome the impending energy crisis are greatly disappointed that Adani group has decided not to go ahead with the fully subscribed  Rs.20,000 crore   Follow On Public Offer.

Using this public offer of Rs.20,000 crore,  Adani group earlier announced that it would spend a substantial amount to set up green hydrogen projects,  which are unlikely to happen now.

Need for green hydrogen energy project

India presently imports around  80% of it’s crude oil requirement amounting to around 250 million tonne per annum,. India is also importing around 50% of India’s requirement of natural gas, which amounts to around 35 billion cubic metres per annum.

Asia has a very significant role to play in the global energy transition. [ Illustration Credit: Adani Group]

Import requirement of crude oil and natural gas is likely to increase at 6 to 7% per annum in the coming years, as domestic production of crude oil and natural gas is likely to remain stagnant in the coming years.

Amongst many plans being implemented by the government of India to reduce the use of fossil fuel and avoid global warming, the promotion of green energy projects in a big way is one of the very important strategies.

The government of India has allotted Rs.35,000 crore for green energy projects in the 2023-24 annual budget.

The government of India is targeting to generate five million tonnes of green hydrogen annually from the year 2030, which is the industry’s total amount of (non-green) hydrogen consumed today.

This shift to green hydrogen would avoid  30  to 40 million tonnes of carbon dioxide emissions per annum and avert import of more than ₹60,000 crore worth of natural gas and crude oil.

Adani group’s proposed plans:

Adani group’s business spans coal trading, mining, FMCG (Adani Wilmar), seaport, solar power manufacturing, airports, roads, data centres, green hydrogen and so on. 

If the proposed public offer would have been accepted by Adani group, about ₹10,800 crores would have been used to fund the capital needs of green hydrogen projects, airports and expressways. 

Green hydrogen project proposal of Adani group covers the green hydrogen ecosystem from scratch.

While a few other green hydrogen projects are in the preliminary stage in India, the green hydrogen project proposal of Adani group is one of the largest.

A big setback for India’s project investment plans:

Private sector investments in projects like what Adani group has announced have to happen in a big way if India is to attain the target of 5 trillion dollar economy in the coming years.

Obviously, to attain this target, many massive projects require huge investment, for which large public issues of several thousand crores of rupees are required. 

If such public issues were to be throttled and sabotaged by vicious and motivated campaigns by some so-called research groups, then,  it would result in big setbacks for India’s future development programmes.

When an industrial group achieves spectacular growth, it is seen that those who cannot match the performance of the fast-growing group view such performance with surprise and disbelief. 

There have been cases and instances, where competitors from India or abroad would try to indirectly launch campaigns against the fast-growing group and support negative campaigns.

There have also been cases where motivated environmental groups have scuttled projects by carrying out hate campaigns and stating unproven environmental violations against particular companies. The immediate example is the closure of Sterlite Copper unit in Tamil Nadu

There have been many instances to show such motivated campaigns across the world for whatever reasons.

These conditions cause setback to India’s plans to achieve big leap forward.

Adani group   – A victim of motivated campaign  in this case:

A vicious campaign   against Adani group   was carried out by a US-based investment research firm known as  Hindenburg Research, stating several  vague  allegations, some unproven violations 

Due to the massive publicity given to such campaigns in Indian media before proper investigation, the gullible investors became panicky.  In such circumstance, the share of Adani group have seen massive losses.

In such extraordinary circumstances, Adani group felt that going ahead with the fully subscribed issue will not be correct,  since the interest of the investors have to be protected.

The net result of the situation is that  India has lost massive investment opportunities in green hydrogen projects.

Further, the motivated American research team and the detractors against India, wherever they may be,   seem to be highly pleased and satisfied.

The entire Adani episode is a case of negative forces winning ,  which is a very unfortunate situation for a growing and developing country like India.

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