Shares of Indian Renewable Energy Development Agency (IREDA) rose over 4% in opening trade on Thursday after the state-owned company received the government’s approval to raise around ₹4,500 crore through fresh equity issue. The central government, which owns 75% stake in IREDA, will dilute up to 7% shareholding in the company through the qualified institutions placement (QIP) route.
The fundraising is part of the renewable sector-focused NBFC’s plan to raise ₹24,200 crore in the financial year 2024-25 through issuance of bonds, term loans, commercial paper etc. from domestic and international markets. In June this year, the company garnered ₹1,500 crore via bonds.
Cheering the news, shares of IREDA rose as much as 4.4% to ₹237.50 on the BSE, while the market capitalisation climbed over ₹64,000 crore. Early today, the stock opened higher at ₹234 against the previous closing price of ₹227.50, snapping four sessions losing streak.
IREDA shares touched its all-time high of ₹310 on July 15, 2024, surging more than 6 times against its lowest level of ₹49.99 touched on its listing on domestic bourses on November 29, 2023. The NBFC stock has risen more than 640% against the initial public offering (IPO) price of ₹32 apiece.
In a post-market hour exchange filing on Wednesday, IREDA said that the Department of Investment and Public Asset Management (DIPAM) on September 18, 2024, approved the proposal of the raising ₹4,500 crore via QIP route, in one or more tranches.
“The Department of Investment and Public Asset Management (DIPAM) vide their OM dated September 18, 2024, conveyed the approval of the Alternative Mechanism upon the recommendation of High Level Committee on the proposal of the raising of funds by IREDA, pursuant to which Alternative Mechanism has allowed for the dilution of GOI shareholding in IREDA, owing to issue fresh equity through Qualified Institutions Placement (QIP) route upto an extent of 7% of the paid-up equity of IREDA on post issue basis in one or more tranches,” it said in a BSE filing last evening.
As per the company, the fund-raising will strengthen its capital base, enabling the organisation to scale its financing for renewable energy projects and further accelerate India’s transition to clean energy.
“DIPAM approval represents a critical step forward in our expansion plans. With fresh capital infusion, we will be better positioned to support India’s ambitious renewable energy goals and continue playing a pivotal role in financing clean energy projects across the country,” says Pradip Kumar Das, CMD, IREDA.
On August 29, the board of the company had given nod for raising funds by way of equity capital for an amount aggregating upto ₹4,500 crore in one or more tranches through further public offer, qualified institutional placement, right issue, preferential issue, or any other permitted mode.
Established in 1987, IREDA is the only listed public sector NBFC that is solely focused on green energy sectors, engaged in promoting, developing and extending financial assistance for setting up projects relating to renewable sources of energy. As of June 30, 2024, the loan book of the company stood at ₹63,207 crore as against ₹47,207 crore in Q1 FY24, up by 33.8%. The NBFC sanctioned ₹9,210 crore loans during the quarter, up by 387% from ₹1,892 crore in the corresponding period last year. It disbursed loans to the tune of ₹5,326 crore compared to ₹3,173 crore in the same period last year.
For Q1 FY25, IREDA reported a net profit of ₹384 crore, up 30% over ₹295 crore in the year-ago period. The revenue from operations grew 32% to ₹1,502 crore as against ₹1,144 crore reported in Q1 FY24.
On the asset quality front, IREDA’s gross NPA and net NPA improved on a sequential basis. In Q1 FY25, gross NPA stood at 2.19% as against 2.36% at the end of the March quarter, while net NPA improved to 0.95% from 0.99% in Q4 FY24.
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