50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

IREDA sets IPO price range, aims to support India's renewable energy growth

EditorNikhilesh Pawar
Published 18/11/2023, 14:46
© Reuters.
IIAN
-

NEW DELHI - The Indian Renewable Energy Development Agency (IREDA), led by Pradip Kumar Das, has announced its upcoming initial public offering (IPO), which is scheduled from November 21-23. The price range for the shares has been set between Rs 30 and Rs 32. This marks the second Central Government entity to go public following the Life Insurance Corporation of India's (LIC) offering last year.

IREDA, recognized as a Mini-Ratna Category-I Public Sector Undertaking (PSU) and a Non-Banking Financial Company-Not Deposit Taking-Systemically Important (NBFCND-SI) that also doubles as an Infrastructure Finance Company (IFC), has been instrumental in financing renewable energy projects across India for nearly three decades. With a current market share of approximately one-third, IREDA has ambitious plans to expand India's installed capacity from its current level of around two-fifths to half-a-terawatt by the end of this decade.

The broader renewable energy sector in India is looking to attract investments totaling three trillion INR, with NBFCs like IREDA expected to supply four-tenths of this amount. As of September this year, IREDA's financial health appeared robust with term loans amassing nearly fifty thousand crores INR. The company's financial growth is evident in its net interest income, which exceeded thirteen hundred crores INR, and net profits that topped eight hundred crores INR for the fiscal year 2023. Additionally, IREDA boasts a strong capital adequacy ratio standing over eighteen percent for FY23.

For the semester ending in September, IREDA reported net interest earnings close to eight hundred crores INR and post-tax profits nearing six hundred crores INR. During this period, it also approved loans amounting to nearly five thousand crores INR. The company's financial position was further bolstered by a significant capital injection of fifteen hundred crores INR from the government in March and benefits from dividend exemptions, all while complying with the Reserve Bank of India’s regulatory framework.

IREDA's IPO comes at a time when India is undergoing a transformative shift in its energy sector, moving traditional renewable sources into mainstream ones and playing a significant role in supporting other developing countries through initiatives like the International Solar Alliance. The agency's efforts are pivotal in achieving India's ambitious renewable energy targets and contributing to global sustainable development goals.

InvestingPro Insights

In the light of the forthcoming initial public offering (IPO) of the Indian Renewable Energy Development Agency (IREDA), InvestingPro provides some key insights that potential investors may find valuable.

According to InvestingPro data, companies like IREDA that have a high return on invested capital and operate with a high return on assets often yield significant returns for their investors. This aligns with IREDA's robust financial health, as evidenced by its strong capital adequacy ratio and net profits for the fiscal year 2023.

InvestingPro Tips also suggests that companies that have raised their dividends for consecutive years are often reliable investments. IREDA's financial growth, which is evident in its net interest income and the significant capital injection it received from the government, suggests a potential for consistent dividends in the future.

As an added bonus, InvestingPro subscription is now available at an exclusive Black Friday sale, with discounts of up to 55%. Subscribers gain access to a wealth of additional tips, with ten more tips available for companies like IREDA. This valuable information can provide investors with the edge they need to make informed decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.