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IREDA extends rally in weak market; stock zooms 115% against issue price

The stock hit a new high of Rs 68.91 on the BSE in intra-day trade today, has zoomed 115% against its issue price of Rs 32 per share on the BSE.

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Illustration by Binay Sinha

SI Reporter Mumbai

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Shares of Indian Renewable Energy Development Agency (IREDA) continued their upward move for the second, with its stock price hitting a new high of Rs 68.91 on Thursday. With this, the stock has more than doubled against its issue price of Rs 32. 

The stock of the state-owned financial institution made a strong market debut on Wednesday listing at Rs 59.90, a premium of 87 per cent over its issue price.

Today, it rallied 15 per cent intra-day on the BSE. At 10:57 AM; IREDA was quoting 8.5 per cent higher at Rs 65.07 as compared to 0.19 per cent decline in the S&P BSE Sensex.

A combined 265.39 million equity shares had changed hands on the NSE and BSE.

IREDA is a wholly owned government enterprise under the administrative control of the Ministry of New and Renewable Energy (MNRE).

It is notified as a “Public Financial Institution” and is registered with the Reserve Bank of India as a systemically important non-deposit taking non-banking finance company (NBFC) with Infrastructure Finance Company status.

IREDA offers a range of financial products and services, spanning project conception to post-commissioning, covering various value chain activities including equipment manufacturing and transmission. IREDA has a diverse term loan portfolio, financing projects in various renewable energy (RE) sectors like solar, wind, hydro, transmission, biomass, waste-to-energy, ethanol, compressed biogas, hybrid RE, EEC, and green mobility.

IREDA recorded a net profit of Rs 579 crore on a total income of Rs 2,320 crore in first half (April to September) of financial year 2023-24 (H1FY24), with net interest income rising by 20 per cent YoY to Rs 729 crore in H1FY24.

IREDA has the best asset quality among compared peers, with gross NPAs decreasing to 3.1 per cent in H1FY24 from 5.1 per cent in H1FY23 and net NPAs declining to 1.7 per cent from 2.7 per cent.

India's renewable energy capacity has reached 179 GW (2023), growing at a 10 per cent compounded annual growth rate (CAGR) between FY15 and FY23.

Projections foresee a significant rise to 595 GW by FY32, necessitating an investment of Rs 24.43 trillion for capacity additions. Financing requirements for sectors like solar and wind are poised to expand substantially.

The company has a healthy RoA which improved from 1.1 per cent in FY21 to 2.0 per cent in FY23, while the RoE improved from 12.6 per cent to 15.4 per cent over the same period, which is impressive within the industry.

Geojit Financial Services said that the power-financing NBFCs are expected to continue this growth momentum, and this growth is likely to be driven by an increase in power demand, a rise in population, renewable integration, and the sustainability goals of the country.

With consistent growth in loan books, healthy return ratios, and varied financial products, IREDA is well placed to capitalize on the growth in the RE sector, the brokerage said.

With loan assets of around Rs 47,075 crore, IREDA is the largest pure-play green financing NBFC in India. To meet the net-zero emission target, the government has set a humongous target for RE installations by 2030.

Considering its nodal agency status and varied financial products, IREDA is well placed to capitalize the growth in the RE sector, according to Choice Broking.

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First Published: Nov 30 2023 | 11:26 AM IST

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