IREDA, up 500% from IPO price, seeks approval for FPO
The Indian Renewable Energy Development Agency (IREDA) is planning a Follow-on Public Offer (FPO) to raise equity capital, pending government approval. IREDA CMD Pradip Kumar Das revealed in an interview with CNBC-TV18 that the FPO, expected between November this year and February next year, is necessary for further equity infusion. The proposed FPO could range from ₹4,000 crore to ₹5,000 crore.
IREDA's equity infusion aimed at maintaining stable rating
Das explained the need for another equity inclusion, stating, "We need equity inclusion again, because the way our growth is happening and the sectoral requirement is, so we need to maintain our 'triple A' stable rating so we need to increase further equity." IREDA IPO was launched in November 2023 at ₹32 apiece. The stock is currently trading at ₹197.48, a significant 520% above the IPO issue price. As of March end, the government held a 75% stake in IREDA.
IREDA aims to reduce borrowing costs
IREDA has submitted a request to the Finance Ministry for inclusion under Section 54EC of the Income Tax Act. Das believes that this move will benefit the company by reducing borrowing costs. In Q1 of FY2025, IREDA sanctioned loans worth ₹9,136 crore, marking a nearly five-fold growth from last year's figure of ₹1,893 crore.
IREDA's loan disbursements show significant growth
The company's loan disbursements for the first quarter stood at ₹5,320 crore, a 67.6% growth compared to the ₹3,174 crore disbursed during the same period last year. By the end of June quarter, IREDA's loan book had grown by 33.77% from the previous year, reaching ₹63,150 crore. This growth is in line with IREDA's ambition to become a Maharatna PSU by financial year 2030.
