IREDA soars 14% on heavy volumes; stock zooms 129% against issue price

The stock made its debut on November 29. During the past three decades, IREDA has been supporting all forms of RE -- solar, wind, hydro -- and even newer technologies.

Shares of Indian Renewable Energy Development Agency (IREDA) hit a new high of Rs 73.40, as they rallied 14 per cent on the BSE in Friday's intra-day trade on the back of heavy volumes. A combined 111.96 million equity shares of IREDA changed hands on the NSE and BSE till 10:22 AM.

Currently, the stock of the state-owned financial institution company has zoomed 129 per cent against its issue price of Rs 32 per share. IREDA made its stock market debut on November 29.

IREDA is India's only renewable energy (RE)-focused state-owned non-banking financial company (NBFC). IREDA's positioning as the largest pure-play green financing NBFC in India places it among the very few players who are well placed to capitalise on the rapid growth in the RE sector.  There has been a fair amount of thrust on RE after 2014 by the new government at the Centre.

Diversification and expansion in emerging green technologies like green hydrogen, pumped hydro storage power plants, battery storage value chain and green energy corridor provides scope for longer term sustainability of high growth of its loan book.

IREDA operates in the niche segment of RE which is poised to grow at a rapid pace with the government's increased focus. Further, elevation of IREDA to the 'Schedule A' category opens the door for "Navratna" status, which would strengthen the balance sheet further. This along with lowest cost of funding and stringent corporate governance provides IREDA a competitive edge, according to Motilal Oswal Financial Services.

During the past three decades, IREDA has been supporting all forms of RE -- solar, wind, hydro -- and even newer technologies such as biofuel and electric mobility.

In March 2020, IRDEA's loan book size was Rs 23,000 crore. In the past three years the company has added another Rs 24,000 crore. By September this year, its loan books reached more than Rs 47,000 crore. RE comprises 62 per cent of its loan books (30 per cent solar, 20 per cent wind, and the rest hydro).

The company has around 25 per cent of its loan books for state utilities and 18 per cent in emerging RE. The 500-Gw RE target by 2030 would require at least Rs 30 trillion and Rs 40-45 trillion when e-mobility is added to it. Government NBFCs -- Power Finance Corporation (PFC), REC, and the IREDA -- will play a key role in RE development.

IREDA is now trying to widen its scope to new and emerging green sectors and expanding its borrower base, use innovative financing tools to cater to large projects, and become a Navratna soon, the Business Standard reported. READ MORE