Mumbai
The Indian Renewable Energy Development Agency (IREDA), a state-owned entity, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). This marks the first IPO by a public sector enterprise since Life Insurance Corporation’s public issue in May of the previous year.
The public issue will consist of 67.19 crore equity shares, comprising a fresh issue of 40.31 crore equity shares by the company and an offer-for-sale of 26.88 crore shares by the Government of India. The net proceeds from the fresh issue will be primarily used to bolster the capital base to meet future capital requirements and for onward lending.
IREDA, a non-deposit-taking non-banking finance company with infrastructure finance company status, provides financial support for new and renewable energy (RE) projects as well as energy efficiency and conservation (EEC) projects.
As of June 2023, IREDA’s outstanding term loans grew at a compound annual growth rate (CAGR) of 30 percent during FY21-FY23, reaching Rs 47,206.66 crore at the end of the June quarter of FY24. The provision coverage ratio improved to 49.25 percent in FY23, up from 41.45 percent in FY22, and stood at 48.68 percent at the end of the June FY24 quarter.
IREDA’s IPO is expected to attract investor interest as it aligns with India’s growing focus on renewable energy and sustainability. The company plays a crucial role in financing projects in these sectors, and the funds raised through the IPO will further support its mission.
