Indian Renewable Energy Development Agency (IREDA)

Indian Renewable Energy Development Agency (IREDA), a state-owned non-banking finance company, intends to bolster its loan portfolio for renewable energy projects through a Follow-on Public Offer (FPO) slated for February 2025. The FPO is projected to raise between INR 4,500 and 5,000 crores. The requisite proposal has been submitted to the Ministry of New and Renewable Energy for subsequent forwarding to the Department of Investment and Public Asset Management.

Subsequent to the FPO, the government’s equity stake in IREDA is anticipated to decrease from the current 75%. As the FPO necessitates the infusion of fresh equity, a commensurate reduction in the government’s shareholding is expected. Accordingly, formal approval from the government will be sought for this dilution.

IREDA intends to complement its equity raise through a debt infusion of INR 20,000 to 25,000 crores. This, coupled with the FPO proceeds, will facilitate an overall debt-raising exercise of INR 30,000 to 35,000 crores, aligned with the company’s growth trajectory. The company’s robust financial performance since its IPO in November 2023, with a tenfold stock price appreciation, positions it favorably for the upcoming FPO.

The company anticipates a significant increase in loan disbursements during the current fiscal year, underpinned by the government’s ambitious renewable energy targets. This expectation is corroborated by the substantial growth in loan sanctions and disbursements during the first quarter of the fiscal year.

IREDA has formally requested the government to extend the benefits of Section 54EC of the Income Tax Act, currently available to other energy sector NBFCs, to the company.