The energy sector in India is in the news these days. Rising power demand, fluctuating oil and gas prices, and rapidly expanding renewable projects have all brought this topic back into the spotlight. Many investors are now wondering how to invest comfortably in this transition, and that’s where energy ETFs become a convenient option. In this blog, we’ll explore the available energy ETFs in India, how they work, and which option might be right for you.
What are Energy ETFs?
An Energy ETF is a fund that offers the opportunity to invest in multiple energy-related companies. These include companies such as oil and gas, power generation, power grids, refining, and sometimes renewable energy. You buy and sell them on the exchange just like stocks, but you get a mix of exposure to the entire sector; there’s no reliance on a single company.
Energy Sector ETF India vs. Broad Energy ETFs
Two types of energy ETFs are available in India:
Energy Sector ETF India : These are ETFs that follow a specific index—such as the Nifty Oil & Gas or Nifty Energy Index. They mostly include major companies in the oil, gas, and power sectors. This structure is considered more stable and less volatile.
Broad Energy or Thematic ETFs : These funds cover traditional energy as well as renewables, equipment manufacturers, grid companies, or global clean-tech firms. This option is for investors who believe in the energy transition and want long-term growth.
Why are ETFs considered better than individual stocks?
In the energy sector, the risk and performance of individual companies can vary significantly; sometimes crude prices fall, affecting refining companies, or sometimes power utilities rise, boosting demand. ETFs balance these fluctuations because:
- Investments are spread across multiple companies
- Risk is reduced
- Research becomes easier
- Long-term returns are relatively stable
- Can be bought and sold at any time, just like stocks.
Read Also: List of Best Commodity ETFs in India
Top Energy ETFs in India
| S.No | Fund Name | Current Price | 52 Week low | 52 Week high | AUM (Rs Cr) |
|---|---|---|---|---|---|
| 1 | CPSE ETF | 92.75 | 74.90 | 96.16 | 30,725 Cr |
| 2 | ICICI Prudential Nifty Oil & Gas ETF | 12.26 | 9.40 | 12.66 | 223 Cr |
| 3 | Mirae Asset Nifty Energy ETF Share Price | 35.97 | 35.84 | 40 | – |
| 4 | Groww BSE Power ETF | 10.04 | 9.44 | 11.20 | – |
| 5 | Aditya Birla Sun Life Nifty 50 ETF | 30.31 | 20.37 | 30.73 | 3,190 Cr |
1. CPSE ETF
The CPSE ETF offers a simple way to invest in select Indian public sector companies, providing exposure to key sectors like energy, power, and defense through a single fund. Its portfolio includes large PSU companies like NTPC, Power Grid, and Bharat Electronics, which are considered stable in their respective sectors. The fund’s expense ratio is kept quite low, making it an affordable option for long-term investors. The CPSE ETF is ideal for those seeking public sector stability, regular cash flows, and diversified exposure to energy-intensive companies.
Returns :
| Particular | 1Y Return | 3Y Return | 5Y Return |
|---|---|---|---|
| Fund Returns | 5.09% | 34.6% | 39.01% |
Fundamentals :
| No Of Stocks | 11 |
| Expense Ratio | 0.07 |
| Portfolio P/E Ratio | 14.66 |
| Portfolio P/B Ratio | 2.12 |
2. ICICI Prudential Nifty Oil & Gas ETF
The ICICI Prudential Nifty Oil & Gas ETF is a thematic ETF based on India’s oil and gas sector, tracking the Nifty Oil & Gas Index. Its focus is on leading companies involved in exploration, refining, marketing, and gas distribution. The fund’s holdings include major names such as Reliance Industries, ONGC, Oil India, BPCL, and HPCL, providing coverage of the entire sector in a single ETF. Its low expense ratio and simple structure make it suitable for investors seeking focused exposure to the energy industry and adding an oil and gas theme to their portfolio.
Returns :
| Particular | 1Y Return | 3Y Return | 5Y Return |
|---|---|---|---|
| Fund Returns | 15.04% | -2.72% | – |
Fundamentals :
| No Of Stocks | 15 |
| Expense Ratio | 0.40 |
| Portfolio P/E Ratio | 12.30 |
| Portfolio P/B Ratio | 1.62 |
3. Mirae Asset Nifty Energy ETF
The Mirae Asset Nifty Energy ETF is a good option for investing in the energy sector in India, primarily covering oil, gas, power, and renewable companies. This ETF aims to track the Nifty Energy Total Return Index, allowing investors to participate in the entire energy cycle. For example, the index has a weighting of approximately 50% in Oil & Gas, 25% in the Power sector, and 25% in Capital Goods/Infrastructure. This mix makes it suitable for investors who want to participate in India’s energy transition, not just traditional energy.
Returns :
| Particular | 1Y Return | 3Y Return | 5Y Return |
|---|---|---|---|
| Fund Returns | -7.69% | – | – |
4. Groww BSE Power ETF
Groww BSE Power ETF offers exposure primarily to India’s power sector (generation, transmission, and power utilities). The fund holds a significant portion of its exposure to large companies such as NTPC Ltd (21.1%) and Power Grid Corporation of India Ltd (17.3%). Its total equity exposure is approximately 99.6%, and it also includes 29.5% exposure to the industrial capital goods sector. The expense ratio is approximately 0.43%. This fund is therefore suitable for investors seeking to participate in the long-term opportunities of the Indian power sector.
Returns :
| Particular | 1Y Return | 3Y Return | 5Y Return |
|---|---|---|---|
| Fund Returns | 1.21% | 1.21% | – |
5. Aditya Birla Sun Life Nifty 50 ETF
Aditya Birla Sun Life Nifty 50 ETF is a leading index-tracking ETF in India that follows the composition of the Nifty 50. Its objective is to invest in a mix of broad-based companies included in the index, such as banks, energy, IT, and consumer goods. The fund is spread across approximately 51 stocks, and its expense ratio is also very low around 0.04% making it a cost-effective investment option. The P/E ratio is around 22.9, which is close to the market average. Investors can choose this ETF to gain access to large-cap stable companies in their portfolio, especially if they want a broader Indian equity mix rather than an energy-themed one.
Returns :
| Particular | 1Y Return | 3Y Return | 5Y Return |
|---|---|---|---|
| Fund Returns | 12.1% | 13.7% | 16.66% |
Fundamentals :
| No Of Stocks | 51 |
| Expense Ratio | 0.04 |
| Portfolio P/E Ratio | 22.91 |
| Portfolio P/B Ratio | 3.46 |
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India’s Energy Landscape: Key Trends Shaping ETF Demand
- Renewable Energy is Growing Rapidly : Solar and wind projects in India have grown rapidly over the past few years. By June 2025, approximately 226-227 GW of renewable capacity existed. This means that the share of clean energy in the country is steadily increasing. The government has set a target of 500 GW of non-fossil capacity by 2030, so new solar and wind plants are constantly being commissioned. This is why investors are now showing greater interest in green energy.
- Conventional Energy Still a Significant Share : Renewables are growing, but most of the country’s electricity still comes from coal, oil, and gas. In FY 2024-25, approximately 74% of total electricity generation was from fossil sources. This is why companies like NTPC, Power Grid, ONGC, and Coal India still play a significant role in energy ETFs. These companies are considered stable, so their weighting in ETFs remains high.
- Government policies are guiding the sector : Over the past two years, the government has significantly focused on solar rooftops, large solar parks, renewable tenders, and grid improvements. Renewable power generation also increased by over 24% in the first months of 2025. While there are occasional issues such as project delays and tender cancellations, overall, the sector is considered a strong investment option. This environment is beneficial for ETF investors, as they gain exposure to both traditional and green companies.
Types of Energy ETFs Available for Indian Investors
1. Oil & Gas ETFs
These ETFs track indices based on India’s oil and gas sector, including companies like ONGC, Oil India, Reliance, BPCL, and HPCL. The advantage of these ETFs is that you get exposure to the entire energy sector oil and gas in a single fund. This option is ideal for investors who understand crude oil price trends and the traditional energy sector and want exposure to stable large players.
2. Power & Utilities ETFs
This category includes ETFs that invest in power generation, transmission, and distribution companies—such as NTPC, Power Grid, Tata Power, and other utility companies. These are generally businesses with stable demand, so their risk is considered slightly lower than oil and gas. This option is good for investors seeking steady and less volatile energy exposure.
3. Green Energy / Renewable Energy–Focused Funds
Pure-play Green Energy ETFs are currently limited in India, but some thematic funds and some index-based products offer indirect exposure to renewable companies—such as solar, wind, equipment makers, and clean-tech companies. This option is for those who believe in the energy transition and want long-term growth-based exposure.
4. International Clean Energy ETFs (Global Exposure)
If investors seek pure-play exposure to clean energy, investing in global clean-energy ETFs through Indian brokers can be done. These include solar module manufacturers, wind turbine companies, battery technology, and global utility giants. This option is ideal for investors who want to diversify and take advantage of clean-tech growth outside India.
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How to Evaluate an Energy ETF Before Investing
1. Check the Fund’s Size and Trading Activity
First, consider the amount of money invested in the ETF and its daily trading activity. If the fund is too small or has few buyers and sellers, it can be challenging to buy or sell shares. Choose an ETF that trades moderately daily to make entry and exit easier.
2. Expenses and Index Tracking
Every ETF has a small expense, and it’s also important that it accurately tracks its index. Pay attention to two things: reasonable expenses and the fund’s performance doesn’t deviate significantly from its benchmark. This gives you an idea of the fund’s management’s integrity.
3. Companies the Fund Invests In
Looking at the list of ETFs can help you understand the types of companies your money is investing in. Some ETFs have a higher oil and gas portfolio, while others have a higher share of power companies. It’s important to consider which sector the fund focuses on the most and whether it resonates with you.
4. How well it matches your own portfolio
Sometimes we already hold some energy companies. If the same companies are repeated in an ETF, the portfolio becomes overly heavy in one sector. Before buying an ETF, take a look at your existing stocks and see if there’s excessive duplication.
5. Is the ETF’s focus clear or mixed?
Some ETFs focus solely on conventional energy, while others also include a small amount of renewable energy. Determine this based on your needs—whether you want exposure to the renewable energy sector, only green energy, or a little bit of both. This makes it easier to choose.
Risks to Consider Before Investing in Energy ETFs
- Policy Risk : Government policies significantly impact the energy sector especially renewable projects. Changes in regulations, stalling of tenders, or delays in approvals directly impact fund returns. Therefore, it is important to monitor policy updates.
- Fluctuations in Oil & Gas Prices : If an ETF has a high share of oil and gas companies, the impact of international crude prices is immediately visible. If prices rise, the companies benefit, and if they fall, the ETF may also come under pressure. This risk always exists.
- Liquidity and Spread Issues : Some energy ETFs are thinly traded. When buying or selling in such funds, the price may differ from your expectations due to the large bid-ask spread. Therefore, it is important to monitor trading volume.
- High Concentration in Holdings : Many ETFs rely heavily on a few large companies. If the performance of those 2-3 companies deteriorates, the entire ETF could be affected. Be sure to check the fund’s concentration.
- The Impact of Index Rebalancing : The ETF rebalances with the index it tracks. If the index changes frequently, short-term performance may fluctuate slightly. It’s best to understand this before investing.
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Conclusion
The energy sector is currently experiencing a dynamic dynamic renewables are gaining momentum, while traditional energy remains essential. The unique advantage of energy ETFs is that they capture the full spectrum of change in one place. If you’re interested in venturing into this theme, consider the ETF’s exposure, its risks, and your needs. Start small and build your understanding over time. That’s the easiest approach.
Frequently Asked Questions (FAQs)
What is an Energy ETF?
It’s a fund that invests in multiple companies in the energy sector.
Are Energy ETFs good for beginners?
Yes, because there’s no reliance on a single company and the risk is balanced.
Is there any pure Green Energy ETF in India?
Currently, there are very few ETFs directly focused on green energy, but some funds offer a renewable component.
How much should I invest in Energy ETFs?
Depending on your needs and risk tolerance, it’s considered appropriate to invest 5-10%.
Do Energy ETFs carry high risk?
They fluctuate due to factors such as oil and gas prices, policies, and project delays.
