IREDA’s IPO Receives Strong Response on Day 1, Subscription Reaches 1.96 Times
The initial public offer (IPO) by the Government of India-owned IREDA received a positive response from Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs), and retail investors on the first day of the issue. The ₹2,150 crore issue, which closes on November 23, has fixed a price band of ₹30-32 per share.
On the first day, the IPO was subscribed 1.96 times, with the non-institutional investor portion reaching 2.7 times and the QIBs portion reaching 1.3 times. The company also raised ₹643 crore from anchor investors ahead of the IPO.
IREDA, a public financial institution with over 36 years of experience in promoting and developing new and renewable energy projects, intends to use the net proceeds from the IPO to augment its capital base to meet future capital requirements and onward lending. It provides financial products and services for various energy projects, and as of September 30, 2023, it had a diversified portfolio of term loan outstanding amounting to ₹47,514 crore.
The financial performance of IREDA has been strong, with its revenue from operations growing 24% in FY23 and its net profit increasing by 36% during the same period. However, its finances are indirectly linked to state electricity distribution companies (discoms), and the poor health of these discoms may lead to delays in payments to renewable energy projects that IREDA finances.
The company’s IPO is set to close on November 23, and investors can bid for a minimum of 460 shares and in multiples of 460 thereafter. With its strong track record and positive response from investors, the IPO is expected to attract significant interest in the market.
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