Linde India
Linde India is a 75% subsidiary of The BOC Group Ltd, UK (wholly owned subsidiary of Linde AG and part of the Linde group), and is one of the largest players in the domestic gases business.
The Linde group is the world’s leading supplier of industrial, process and specialty gases, with operations across 100 countries.
Investment Rationale
Leader in Hydrogen Energy – the fuel of future: Linde has decades of experience in the field of hydrogen plants and has built more than 200 plants for hydrogen manufacture with capacities of from 1,000 to over 100,000 Nm³/h.
Hydrogen offers compelling benefits. First and foremost, it supports a gradual transition towards lower-carbon sources of energy as it can be generated from natural gas and other non-renewable by-products. In addition, it can be used as an energy carrier; in other words, a medium to store energy from renewable and other sources. Looking to the future, it can be generated at scale with a zero-carbon footprint by using renewable energy such as solar or wind power, for instance, to split water (electrolysis).
Demand for hydrogen technologies is rising given their potential to accelerate the transition to more sustainable forms of energy while still supporting current energy models with all their regional variations. Hydrogen is a zero-emissions source of fuel for trains, buses and cars. It can be used as a feedstock gas for industries such as chemical, refining and steel. In addition, it is a source of heat and power for buildings, and can buffer energy generated from renewable sources.
Linde is the only company to cover every step in the hydrogen value chain from production and processing through distribution and storage to everyday industrial and consumer applications. Building on decades of research and countless real-world projects, Linde’s hydrogen capabilities demonstrate its innovative power and proven expertise in delivering workable, economically viable hydrogen technologies suited to mass deployment.
Hydrogen is an energy-rich gas – this is one of the reasons why it is used as a rocket fuel. And it can be produced from a variety of feedstock – also electricity – and stored in many different ways: from a few grams in handheld cartridges to thousands of tons in an underground cavern. This gives hydrogen a unique potential to store renewable energy – both on small and very large scale. Especially for longer term storage (weeks to months), hydrogen is today the only viable alternative in sight. And it’s versatile to use: It can be converted back to power, but also be used as fuel for cars, a material for many industrial products (such as hardened fats) or even be converted to synthetic natural gas. Hydrogen makes all these markets accessible for renewable power.
The hydrogen future is here now. And Linde can deliver it. The company covers every link in the hydrogen value chain from source to service. In fact, the company’s tag line id “Think Hydrogen, Think Linde”. It is the world leader in hydrogen.
A Real-Life Application – Bolzano’s buses: Ahead of the game
Hydrogen fuel cell vehicles (FCVs) have been in action in Bolzano, Italy, for the best part of a decade. Since 2010, five of the 96 city buses in the capital city of South Tyrol are running on hydrogen (H2), providing passengers and local inhabitants with a unique experience: emission and noise-free public transport.
Bolzano was chosen as one of five European “new adopters” in the Clean Hydrogen in European Cities (CHIC) project which ran from 2010 to 2016. The CHIC project provided almost €26 million to help integrate 26 fuel-cell buses in daily operations on regular bus routes across Bolzano, Milan, London, Oslo and Aargau.
But it was Linde who provided the technology and the know-how. In fact, Linde has been the driving force behind hydrogen technology advancement for decades now. From production to storage to fuelling technologies, Linde has paved the way with important technological milestones that make it all possible.
Established market position in the industrial gases segment: Linde India is one of the largest players in the domestic industrial gas industry. Its strong market position is backed by presence of more than 75 years and diverse product portfolio, comprising industrial, medical, compressed and special gases. Moreover, the company has healthy brand equity and the ability to provide end-to-end solutions to customers in the tonnage segment.
Strong financial, operational and managerial support from the parent: Linde India’s standalone financial risk profile remains moderate because of inadequate returns against large, debt-funded capex contracted in the past. However, Linde India receives adequate support from Linde Plc.
The support from Linde Plc is expected to continue in view of Linde India’s strategic importance to its business expansion plans in Asia and other emerging markets.
Strong Financial Position: A significant portion of revenue in the gas segment comes from installation/tonnage, wherein the company enters into long-term (15-20years) take-or-pay contracts with customers; these ensure stable cash flow and profitability and prevent significant decline in revenue during downturns. Further, as part of the global merger between Linde plc and Praxair Inc, both Linde India and Praxair India have formed a 50:50 Joint Venture named LSAS Services Pvt Ltd which will render operational services to both JV partners and is expected to harness the synergies in both entities.