IREDA IPO: The initial public offering of state-owned Indian Renewable Energy Development Agency Ltd (IREDA) is going to be opened for public subscription tomorrow, November 21. The Rs 2,150.21-crore IPO will conclude on November 23. Its price band has been fixed at Rs 30-32 per equity share.
The IPO allotment will take place on November 29, while the share listing might take place on December 4.
IREDA IPO GMP Today
According to market observers, unlisted shares of IREDA were trading Rs 7 higher in the grey market as compared with its issue price. The Rs 7 grey market premium or GMP means the grey market is expecting a 21.88 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
IREDA IPO Lot Size
Investors can bid for a minimum of 460 equity shares and in multiples of 460 equity shares thereafter. Hence, the minimum investment by retail investors would be Rs 13,800 at a lower price band of Rs 30. At the upper end, the bidding amount will increase to Rs 14,720.
IREDA IPO: Should You Subscribe?
Giving ‘subscribe’ recommendation, Sonam Srivastava, founder & fund manager at Wright Research, said, “IREDA’s focus on renewable energy financing is timely, aligning with the global shift towards sustainable energy. As the first government-run company IPO since LIC, it carries a certain credibility. The renewable energy sector’s growth potential is significant, but it’s also subject to policy changes and technological advancements, which could influence IREDA’s performance.”
According to a livemint report, Atul Parakh, CEO at Bigul, said, “Among five mainboard upcoming IPOs next week, state-run IREDA will be on radar of primary market investors as IREDA IPO is expected to give good listing gains and can also be a long-term investment candidate.”
About IREDA IPO
The public issue of the face value of Rs 10 per equity share comprises fresh issuance of equity shares up to 403.16 million and an offer for sale (OFS) of up to 268.78 million shares aggregating to up to 671.94 million equity shares, the government-owned company said.
The issue will garner Rs 2,015.82 crore to Rs 2,150.21 crore at the lower and upper end of the price band, respectively, the company said. The company had reported a net profit of Rs 864.63 crore in FY23 as against Rs 633.53 crore a year earlier while the net interest income increased to Rs 1,323.76 crore from Rs 1,128.04 crore a year ago.
The company is into promoting, developing and extending financial assistance for new and renewable energy projects, and energy efficiency and conservation projects, offering a comprehensive range of financial products and related services, from project conceptualisation to post-commissioning, for renewable energy projects and other value chain activities, such as equipment manufacturing and transmission.
It is also India’s largest pure-play green financing NBFC in India. The company has a geographically diversified portfolio, with term loans outstanding across 23 states and five Union Territories as of September 30, and has four strategically located branches in Mumbai, Hyderabad, Chennai, and Bhubaneshwar to maximize geographical range in terms of territory.
Capital to Risk-Weighted Asset Ratio (CRAR) stood at 18.82 per cent for FY23 and for the six months ended September 30, it was 20.92 per cent, the company said. For H1FY24, net interest income stood at Rs 785.42 crore, and profit after tax was Rs 579.31 crore. For the same period, IREDA sanctioned total loans worth Rs 4,744.50 crore, it said.
As of September 30, 2023, it had a diversified portfolio of term loan outstanding amounting to Rs 47,514.48 crore, as per the company. IDBI Capital Markets & Securities Ltd, BOB Capital Markets Ltd, and SBI Capital Markets Ltd are the book-running lead managers to the issue.