Indian Renewable Energy Development Agency (IREDA) is all set to launch its initial public offering (IPO) with the aim of raising ₹2,150 crores. The IPO will be open for subscription from November 21 to November 23 and offers a price band of ₹30-32 per share. Prospective investors must place bids for a minimum of 460 shares, with increments in multiples of 460 thereafter.
IREDA plans to utilize the proceeds from the IPO to strengthen its capital base and to support its lending activities. As a public financial institution, IREDA plays a crucial role in promoting, developing, and extending financial assistance for renewable energy projects and energy efficiency and conservation initiatives. The company provides a range of financial products and services related to project conceptualization, execution, and maintenance.
The IPO will be a combination of an offer for sale and a fresh issue. The net proceeds generated from the fresh issue will be directed towards enhancing the capital base and meeting future lending requirements. The financial institution holds a diversified portfolio of term loans amounting to ₹47,514 crores as of September 30, 2023.
The book-running lead managers for IREDA’s IPO are IDBI Capital Markets & Securities Limited, BOB Capital Markets Limited, and SBI Capital Markets Limited. Considering the company’s revenue growth and net profit margin, it is set to present a promising investment opportunity to prospective stakeholders.
However, it is important to note some of the financial and risk factors associated with IREDA. The company’s revenue from operations saw a substantial 24% growth in FY23, while its net profit increased by 36% during the same period. IREDA’s capital to risk-weighted asset ratio (CRAR) stood at 18.8% for FY23, with gross non-performing assets (NPA) at 3.21%.
IREDA’s financial performance is indirectly tied to the health of state electricity distribution companies (discoms). Challenges related to project implementation, fluctuations in interest rates, impact from force majeure events, and the competitive environment present additional risks to the company.
Overall, IREDA’s IPO is expected to attract significant interest from investors due to its unique positioning within the renewable energy sector and its intention to address future financing needs.
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