HPCL-led energy fund to back deep-tech start-ups; targets to cut industry’s refining bill worth ₹1 lakh crore - The HinduUpdated - September 10, 2026 12:37 am IST - BengaluruVikas Kaushal, HPCL Chairman and Managing Director | Photo Credit: File photoA band of public sector oil and gas companies, led by Hindustan Petroleum Corporation Ltd. (HPCL), is setting up a deep-tech incubation and investment ecosystem aimed at solving some of the energy sector’s biggest technology challenges, including an opportunity to cut the nearly ₹1 lakh crore that India’s refining industry spends annually on energy, said HPCL Chairman and Managing Director Vikas Kaushal here on Tuesday.A consortium of oil companies have formed a Section 8 company, MC2 Plus, which would operate as an incubator and accelerator for start-ups working on deep technology for the core energy sector. The initiative would subsequently be backed by a professionally managed Alternative Investment Fund (AIF), which Mr. Kaushal described as an “India Energy Fund,” with a sizeable corpus for investing in energy-focused start-ups. The proposed fund is expected to be launched shortly, he added.The initiative marked a shift in the way India’s large energy companies are seeking to engage with the start-up ecosystem — from conventional procurement and limited venture investments to actively identifying industry problems, providing research infrastructure and mentoring entrepreneurs, and potentially investing in technologies emerging from the incubation programme, he stated.“The idea of MC2 Plus and AIF is to attempt to do things differently. Foster innovation. Get brilliant minds together. Get academics and scientists to work together, and also bring the might of the large companies,” Mr. Kaushal said.Saving ₹1 lakh croreAccording to Mr. Kaushal, the scale of the opportunity is particularly significant in refining. India has around 270 million tones of refining capacity, and the sector spends close to ₹1 lakh crore a year on energy used in the refining process alone. The figure does not include the energy required for transporting and distributing petroleum products.He argued that the changing energy landscape was making these challenges increasingly complex. Refiners now have multiple options for sourcing electricity and fuels, including grid power, captive generation and renewable electricity, besides conventional fuels such as gas, naphtha and fuel oil.At the same time, crude and fuel prices have become more volatile, while new fuels and technologies such as green hydrogen, energy storage and round-the-clock renewable power were emerging, he added.This convergence, Mr. Kaushal, created a large number of technology problems that could become opportunities for start-ups. “You have ₹1 lakh crore of money being spent. You have these many new options which are coming up,” he said urging entrepreneurs and researchers in the audience to find ways of optimising energy consumption and costs in the sector.Energy startups skewed towards EVAccording to Mr. Kaushal said India’s start-up ecosystem had expanded rapidly, with more than 1.15 lakh startups registered with the Department for Promotion of Industry and Internal Trade and the country already has 130 unicorns. However, much of the innovation in the energy sector has been concentrated in newer segments rather than the core energy industry.Of the more than 13,000 energy-related start-ups in the country, nearly 45% were working in electric vehicles and mobility, according to data cited by Mr. Kaushal. Battery storage, solar energy and hydrogen have also emerged as important areas of start-up activity. The gap, he said, was deep technology aimed at improving the efficiency and economics of the existing energy system.Five of India’s top 10 companies by turnover are core energy companies or have significant energy operations, highlighting the economic importance of the sector, he said. “Deep-tech, as I would call in the core energy, is something which we missed significantly in the last decade,” Mr. Kaushal said.PSUs acknowledged start-up investment gapThe oil and gas sector itself has been slow to tap the start-up ecosystem, he acknowledged. For instance, HPCL had invested around ₹30 crore in startups over the past six to seven years when it could actually had the ability to invest ₹3,000 crore in that same period and that was a miss the sector had,’’ he lamented.MC2 Plus was intended to address this gap by pooling the capabilities of several oil and gas companies rather than having individual companies pursue start-ups independently. HPCL would establish an incubator at its research facility in Bengaluru, Mr. Kaushal said, while other oil-sector companies are also expected to open their research infrastructure to start-ups.Mr. Kaushal said the platform would seek participation from start-ups, students, researchers and academics and urged entrepreneurs to approach the programme with solutions to real-world energy problems. “We want to create a deep-tech ecosystem in the country in the core energy domain,” he said.Published - September 09, 2026 06:36 pm ISTSign in to unlock member-only benefits!Access 10 free stories every monthSave stories to read laterAccess to comment on every storySign-up/manage your newsletter subscriptions with a single clickGet notified by email for early access to discounts & offers on our products${ ind + 1 } ${ device }Last active - ${ la }