IREDA Gets Mega Listing At 56.25% Premium, Stocks Trade 86.5% Higher
Indian Renewable Energy Development Agency (IREDA), a government of India (Gol) enterprise, made above expectation debut on Indian bourses on Wednesday, as the stocks listed with 56.25 per cent premium at Rs 50 against the issue price of Rs 32.
The stock traded at Rs 59.50 or 86.56 per cent higher on the National Stock Exchange (NSE) in the afternoon session.
The public financial institution's IPO opened for public bidding on 21 November with the total issue size of Rs 2,150 crore and received 38.8 times subscription.
Since the raised capital of Rs 860 crore was an OFS component, the company will only receive net proceeds of Rs 1,290 crore from the offer.
“In a much anticipated debut, IREDA, a non-banking financial institution (NBFI) dedicated to financing renewable energy projects, made its mark on the stock markets today with a premium of 56 per cent. The listing was above the market expectations, reflecting the strong fundamentals and growth potential of the company,” said Shivani Nyati, Head of Wealth, Swastika Investmart.
IREDA's strong financial performance and focus on the burgeoning renewable energy sector makes it an attractive investment proposition. The renewable energy sector is poised for significant growth in the coming years, driven by government initiatives and increasing environmental concerns.
Investors who participated in the IREDA IPO can be happy with the strong listing gains. The company's long-term prospects also appear promising, making it a worthwhile investment for those with a long-term investment horizon, added Nyati.
In terms of financial records, for the FY 23, the net interest income (NII) increased to Rs 13,237.65 million against Rs 11,280.44 million in the previous year. Net profit increased from Rs 6,335.28 million in fiscal 2022 to Rs 8,646.28 million in fiscal 2023.
For the first half (H1), NII stood at Rs 7,854.23 million, and profit after tax (PAT) was Rs 5,793.15 million. For the same period, IREDA sanctioned total loans amounting to Rs 47,445.03 million.
IDBI Capital Markets & Securities, BOB Capital Markets, and SBI Capital Markets are the book-running lead managers and Link Intime India is the registrar to the offer.
The company intends to utilise the net proceeds for augmenting the capital base to meet further capital requirement and onward lending. Additionally, the firm also expects that listing on bourses will further enhance brand image and brand visibility.
IREDA is a financial institution with over 36 years of experience in promoting, developing and extending financial assistance for new and renewable energy projects, and energy efficiency and conservation projects.
It provides a diverse range of financial products and related services, from project conceptualisation to post- commissioning, for renewable energy projects and other value chain activities, such as equipment manufacturing and transmission.
The firm also extends lines of credit to other non-banking financial companies (NBFCs) for lending to RE and EEC projects. Additionally, it offers loans to government entities and financing schemes for RE suppliers, manufacturers, and contractors.
