Energy stocks gain up to 10% led by BPCL, RIL, IREDA. Here's why

The government's clean energy push in the Union Budget 2024 and softer crude oil prices led to a strong rally in energy stocks on Friday which jumped over 10%. The gains were led by Bharat Petroleum Corporation (BPCL) which was up 10% intraday and hit its new 52-week high of Rs 555 on the NSE. Meanwhile, index heavyweight Reliance Industries’ (RIL) over 3% surge lent the much-needed impetus to the Nifty Oil & Gas index which also hit a fresh 52-week high.


BPCL was followed by India Oil Corporation (IOC), which gained nearly 9% to reach its new 52-week peak of Rs 161.90. The other top gainers were Castrol India, Hindustan Petroleum Corporation, GAIL India and Gujarat Gas and Oil India which rose up to 6%. Each one of them also hit their 52-week highs. The only laggard was Gujarat State Petronet which was trading with minor declines at 1:20 pm.


Brent crude prices have slipped below the $80 per BBL mark.

Renewable energy stocks were also in action since a slew of announcements by Finance Minister Nirmala Sithraman in her last budget of the Modi 2.0 government. Shares of Indian Renewable Energy Development Agency (IREDA), Waaree Renewable, Gensol Engineering, KPI Green Energy and Inox Wind were up 5% each.

While this was an interim or a vote on account budget and a full budget will come in July after the new government assumes power, FM Sithraman increased allocations on production linked incentive (PLI) schemes on solar power grid from 4,645 crore in 2023-24 (Budgeted Estimates) to Rs 6,200 crore in 2024-25 (BE).

Sitharaman also increased allocations for the National Green Hydrogen Mission to Rs 600 crore for 2024-25 from Rs 297 crore in 2023-24(BE).

Among other measures, she announced that the government will make provisions for viability gap funding for harnessing offshore wind energy potential for an initial capacity of one giga-watt. Moreover, a coal gasification and liquefaction capacity of 100 MT will be set up by 2030 which will also help in reducing imports of natural gas, methanol, and ammonia.

Phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will be mandated, she said on Thursday during her budget speech.

The government will also provide financial assistance for the procurement of biomass aggregation machinery to support collection.

In the solar energy sector, rooftop solarization for 1 crore households will be enabled to obtain up to 300 units of free electricity per month.

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