IREDA’s initial public offer (IPO) has received a strong response from various investors, with the issue being subscribed 1.96 times the shares on offer on the first day. The IPO, which closes on November 23, has fixed a price band of ₹30-32 per share. The company has raised ₹643 crore from anchor investors ahead of the IPO.
According to data from the BSE, the non-institutional investor portion was subscribed 2.7 times, while the qualified institutional buyer (QIBs) portion was subscribed 1.3 times. Retail investors also showed strong interest, with the retail portion being subscribed 1.97 times.
IREDA, a Government of India-owned public financial institution, intends to use the net proceeds from the IPO to augment its capital base to meet future capital requirements and onward lending. The company has over 36 years of experience in promoting, developing, and extending financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects.
As of September 30, 2023, IREDA had a diversified portfolio of term loan outstanding amounting to ₹47,514 crore. Its revenue from operations grew 24% in FY23, with a 36% increase in net profit during the same period. The company’s capital to risk-weighted asset ratio (CRAR) stood at 18.8% for FY23, with gross non-performing assets (NPA) at 3.21% by the end of FY23.
However, the company’s finances are indirectly linked to the health of state electricity distribution companies or discoms. Delays in payments to renewable energy projects financed by IREDA may occur due to the poor health of certain state discoms, which have sought revision in the terms of their existing power purchase agreements (PPAs). A downward revision in the tariffs could negatively affect the company’s borrowers, impacting their repayment capabilities. Investors interested in participating in the IPO can bid for a minimum of 460 shares and in multiples of 460 thereafter.
I have over 10 years of experience in the cryptocurrency industry and I have been on the list of the top authors on LinkedIn for the past 5 years.