ONGC’s Rs 1,200 Crore Green Energy Push: Shares Trade in Green as Maharatna Speeds Up Renewables Transition
Despite this aggressive green energy push, ONGC reported a 31 per cent sequential decline in net profit, amounting to Rs 8,239.9 crore in the third quarter of the current financial year.
Oil and Natural Gas Corporation (ONGC) saw its shares open 1 per cent higher on Tuesday, February 25, 2025, following a major announcement regarding a Rs 1,200 crore investment in its green energy arm. The move aligns with the company’s long-term strategy to accelerate its transition to renewable energy and achieve net-zero emissions by 2038.
The Maharatna PSU will inject Rs 1,200 crore into its wholly owned subsidiary, ONGC Green Ltd. (OGL), through a rights issue of equity shares. The capital raised will facilitate the acquisition of PTC Energy Ltd. (PEL), as per the exchange filing on Monday. Last year, ONGC Green Ltd. had signed a share purchase agreement with PTC India Ltd. to acquire a 100 per cent stake in PEL, which operates 288.8 megawatts of wind power projects across key states such as Andhra Pradesh, Madhya Pradesh, and Karnataka. Additionally, ONGC's board has approved a Rs 75-crore corporate guarantee on behalf of OGL for PEL, reinforcing its commitment to the renewable energy sector.
ONGC Green Ltd., incorporated in February 2024 with an authorized capital of Rs 100 crore, is dedicated to green hydrogen, hydrogen derivatives, carbon capture, and various renewable energy sources, including solar, wind, hydro, tidal, and geothermal power. In March 2024, ONGC had already approved an equity infusion of Rs 99 crore into OGL, along with an in-principle nod for a Rs 1,100 crore investment to support its long-term expansion plans. The latest Rs 1,200 crore infusion marks a decisive step in bolstering ONGC’s clean energy ambitions.
Despite this aggressive green energy push, ONGC reported a 31 per cent sequential decline in net profit, amounting to Rs 8,239.9 crore in the third quarter of the current financial year. Revenue from operations in Q3FY25 stood at Rs 1,66,097 crore, reflecting a marginal decline of 0.75 per cent compared to Rs 1,67,357 crore in the corresponding quarter of the previous year. Additionally, ONGC's consolidated net profit for the December quarter fell 19 per cent year-on-year to Rs 8,622 crore from Rs 10,703 crore reported in the same period last year.
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Over the past year, ONGC shares have declined by 12.84 per cent. On a year-to-date (YTD) basis, the stock is down by 0.74 per cent, while in the last six months, it has witnessed a steep decline of 28.26 per cent. However, following the latest green energy investment announcement, investor sentiment appears to have improved, as indicated by the stock trading in the green territory on Tuesday.
With a strong focus on renewables, ONGC is positioning itself as a key player in India's clean energy future. As the company continues its transition toward sustainability, market participants will closely watch how these strategic investments translate into long-term growth and profitability.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.