Dependence on restructuring and reallocation of gasification assets to position the company as a forerunner in the hydrogen ecosystem. The sale, which will be made on the basis of a slump sale, will unlock value in the synthesis gas activity with the induction of an investor.
Probal Sen, Senior Vice President of Centrum Broking, said: “I think it comes down to the language that was used when they also talked about putting the O2C agreement on the back burner. Very clearly, they mentioned that they would look at this energy company in a different context, that they would look at it as a whole, including the downstream oil and the renewable energy initiatives. If I remember correctly, the press release also talked about re-using some of Jamnagar’s existing factories to somehow meet these green energy aspirations. I think this is the first step in this process.
“The big refining processes produce hydrogen anyway, called gray hydrogen, which is not really environmentally friendly. But I believe that’s what the intention is to switch to blue hydrogen first, which is slightly cleaner, basically this hydrogen with carbon capture, and then reuse and combine them with the initiatives. of green hydrogen that they are somehow trying to do as a separate plant altogether. The aim and intention, therefore, is very clearly to cut down on traditional fuels and reuse some of the gas produced in the process to somehow switch to greener chemicals, specialty chemicals, as well as to produce more cleaner hydrogen as part of the overall integrated complex they have.
From an equity perspective, Sen said, “We currently have a target valuation of around Rs 2,565 with the ‘hold’ rating type. Green energy initiatives, we value them at around 2.50 times, EV to capital employed, which works out to around Rs 290 per EV share. In the O2C segment, we’ve always valued at a slightly lower number than the $ 75 billion of electric vehicles that were floating around. Our target valuation provides an EV of around 63 billion, which translates, I think, to around Rs 750 per share. “
Regarding Oil India, Sen said, “Any surprises on the price of gas from here, or especially for the second half, or any little green sprout that we see on production could push up the price further. price a little more. The valuation, whatever rally has occurred, perhaps leaves room for another 15-20% return of those levels on Oil India. “
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(Edited by : Ajay Vaishnav)