Green Investing in India has become a buzzword much as it has become in the rest of the world.However the Green Industry in India is at a nascent stage compared to other parts of the world .India does not figure in the Clean Technology race with Green Leadership being taken over by China with US ,Japan,South Korea and Europe in hot pursuit.It is not that India is totally bereft of Green Investing Opportunities but on a World Class level, India has still got a long way to go.

Wind Energy

Suzlon is/was the first World Class Green Company from India figuring in the top 5 Global Wind Turbine Makers . It made ambitious acquistions in Europe buying up German turbine producer Repower and Hansen Transmission at the Peak 2008 price levels.The Global Financial Crisis coupled with Execution problems has reduced to a bit player in the Wind Energy Market.It is languishing at 10% of its stock price peak with only faint hopes of a turnaround as it is still saddled with high debt .With the advent of Chinese heavyweights  Goldwind,Suzlon has little chances of winning its lost marketshare back.

Solar Energy

Like Suzlon,Moser Baer had ambitious plans in the Solar Energy field making investments left and right in Crystalline Silicon and Thin Film Solar.Also like Suzlon,its execution has fallen  far short of its ambitions.There are other companies like Tata BP Solar,Webel and others but they are not competitive on the world stage.The recent lobbying for protection from solar imports is clear proof of this fact.

Other Green Segments

India is almost non existent in other upcoming Green Industries of  Energy Efficiency,Energy Storage,Biofuels Clean Transportation etc.Most of the Technology and Equipment is imported from outside.There have been some innovative companies like Reva but these are exceptions which can be counted on fingers.Unlike its strengths in knowledge based sectors like Information Technology and Pharma,India still does not figure in Green Technology.

Green Investing Opportunities

The opportunities for Green Investing are  quite few at present with some upcoming Green IPOs and investing in listed companies like Suzlon,Moser Baer,Webel etc.However these investments are hardly lucrative relative to other booming sectors of the Indian Economy.Greater opportunities lie in the investing in Green Infrastructure like Hydro,Solar and Nuclear Power with substantial PE investments being made in this sector.In Summary,an investor would be much better off searching for “Greener Pastures” in countries other than India

EREC has released a  new report “Re-thinking 2050″ outlining the roadmap to make Europe 100% powered by renewable energy by 2050  . The report was released in the European parliament .While the report discusses a lot about the benefits  to getting to the objective,it has precious little on the specifics of the costs and policies required to get there.Lot on intent and little on action like the Copenhagen meet. The main features to the report are

  1. Develop a European wide supergrid
  2. Large scale growth in wind ,geothermal,oceanic,solar PV,solar thermal and biomass energy
  3. Solar at 50% and Wind at 25% will form the bulk of the renewable energy supplying Europe by 2050
  4. Transport to be mainly fueled by biofuels
  5. Heating and Cooling to be provided by biomass,solar thermal and geothermal energy
  6. Not a lot on policy measures except sticking to the European directives,carbon tax and removal of subsidies for fossil fuels.

 

The report is hugely bullish for solar PV and somewhat bullish for wind if Europe manages to implement this report

Pseudo Green company Codexis which makes enzymes for use in the pharma and biofuel industry managed a strong performance on Friday to close up 8% higher from its IPO prices of $13.

Like the other green IPO A123 Systems this company does not have great financials with losses in the last 2-3 years and prospective losses for the next 2-3 years as well. Both of these companies claim to have great technology to solve critical problems in the fields of transportation in a clean manner.

Note after the initial euphoria A123 system stock price languishes at its IPO prices down almost 60% from its peak as there is little near term prospects of profits as investors cashed in after the initial 1 year lock in period.

While Codexis received a tepid response compared to A123 systems , the current market cap of $477 million seems too high given its super high risky character.Company seems completely dependent on Shell which remains a major investor and its main customer.I don’t have expertise in understanding it core business whether it is a truly path breaking technology. However the main factor supporting the Codexis story is Shell .If Shell continues to support Codexis and its partnership with Brazilian sugar company Cosan uses Codexis technology to make a big biofuel commitment then this stock would be a great one.However I would wait since some of these companies can take a long time in translating promises into reality.