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Top chemical stocks to benefit from booming EV battery ecosystem

Upstox
By Upstox News Desk

3 min read | Updated on July 05, 2024, 16:39 IST

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SUMMARY

Companies in India that produce chemicals such as Gujarat Fluorochemicals, Himadri Speciality Chemicals, and Tata Chemicals have made significant investments in electric vehicle (EV) battery supplies. By 2030 they aim to achieve cathode, anode, and electrolyte production at the highest capacity possible since through this they are now investing billions.

Stock list

FLUOROCHEM
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HSCL
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AMIORG
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TATACHEM
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Indian chemical companies foray into strategic diversification into EV battery supply chain through capex and expansion

Indian chemical companies foray into strategic diversification into EV battery supply chain through capex and expansion

India's chemical companies are diversifying into the Electric Vehicle (EV) battery value chain, focusing on Lithium-Ion Batteries used in EVs, renewable energy storage, and electronics.

According to reports, achieving a 100 GigaWatt Hour (GWh) capacity by 2030 will require a total investment of ₹30,000 crore to ₹35,000 crore across cathode, anode, and electrolytes. The cathode, making up nearly 35% of the total battery cost, represents the majority of this investment, followed by the container (21.9%), anode (9.9%), and copper (3.8%) among other components.

Following battery chemical stocks made capital expenditures

Gujarat Fluorochemicals Ltd, with a market capitalisation of ₹35,728 crore, is a major player in India's production of fluoro-polymers, fluoro-specialties, chemicals, and refrigerants. The company specialise in polyvinylidene fluoride (PVDF) used in various applications including electric vehicle batteries.

Gujarat Fluorochemicals plans to invest $1 billion through GCFL EV Products to expand into battery chemicals and green hydrogen. The company has recently started a LiPF6 plant and aims to begin commercial sales in the second half of FY25, with a ₹800 crore investment planned for FY25 in this sector

Himadri Speciality Chemical Ltd specialises in manufacturing carbon materials and chemicals with a market capitalisation of ₹19,894 crore. The company is actively involved in partnerships with lithium concentrate producers and has significant investments in raw materials for lithium-ion batteries. It plans to invest ₹4,800 crore to set up India's first commercial plant for lithium-ion phosphate cathode active material.
Tata Chemicals Ltd, with a market cap of ₹28,151 crore, is increasingly involved in EV chemicals following Tata Group's $1.6 billion deal for an EV battery plant. They need soda ash to produce lithium carbonate, crucial for lithium-ion and other batteries.

Tata Motors' Sanand plant in India is expanding to add a new lithium-ion battery facility, set to start by 2025. Tata Chemicals plays a key role in Tata's EV battery plans, including a 20-gigawatt lithium-ion cell plant in Gujarat under an MoU with the state government. They plan a capital expenditure of ₹2,000 crore from FY24 to FY27.

Ami Organics Ltd, with a market capitalisation of ₹5,692 crore, has entered a new segment by developing and producing electrolyte salts. They are the first company outside of China to achieve this for lithium-ion and solid batteries. Recently, the company has introduced a liquid electrolyte additive to enhance lithium battery capacity and a specialised electrolyte for solid batteries.

It plans to invest ₹300 crores to build a dedicated electrolyte manufacturing facility in Gujarat, following a non-binding MoU with a global electrolyte manufacturer.

Neogen Chemicals Ltd, with a market capitalisation of ₹4,293 crore, specialises in manufacturing Bromine and Lithium-based organic and organo-metallic chemical compounds. Led by Indian technocrats, the company's chemical division focuses on electrolytes and lithium electrolyte salts used in Lithium-Ion Batteries. Neogen recently signed a technology agreement with MU Ionic Solutions Corporate, Japan, to license its electrolyte manufacturing technology, targeting commercial production starting in 2025 with a capacity of 30,000 MT annually.

The company plans to invest ₹1,500 crore in capital from FY24 to FY26, including investments in land, infrastructure, and electrolyte facilities.

GHCL Ltd, with a market capitalization of ₹5,424 crore, is a major producer of soda ash light, soda ash dense, and sodium bicarbonate chemicals in India. Their chemical division focuses on these products, which find applications in various industries including lithium-ion batteries.

Recently, the company invested ₹6,500 crore in establishing a new soda ash facility in Kutch, Gujarat, aiming to construct a one-million-tonne plant over six years.

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