Bumper Debut for IREDA on Stock Market: Lists at 56% Premium Over IPO Price

The India Renewable Energy Development Agency (IREDA) marked a stunning entry into the stock market, listing at a remarkable 56.25% premium above its initial public offering (IPO) price. The share price soared to Rs 50 at the opening bell on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), significantly higher than the IPO price of Rs 32.

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Before its official listing, IREDA’s shares were already gaining momentum in the grey market, an unofficial trading platform, where they were seen trading at a 37% premium. This grey market activity often serves as a barometer for investors to gauge the potential listing price.

The company, under the Ministry of New and Renewable Energy, successfully raised Rs 2,150.21 crore through its IPO. This comprised a fresh issue of 40.31 crore shares, amounting to Rs 1,290.13 crore, and an offer-for-sale (OFS) of 26.87 crore shares valued at Rs 860.08 crore.

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Attracting massive investor interest, the offering was oversubscribed by 38.8 times. Investors across various categories poured in bids for 1,827.25 crore equity shares (valued at Rs 58,472.07 crore at the upper price band), far exceeding the issue size of 47.09 crore shares.

The price range for the IPO, open from November 21 to November 23, was set at Rs 30-32 per share. The issue was managed by leading financial institutions including IDBI Capital Market Services, BoB Capital Markets, and SBI Capital Markets, with Link Intime India serving as the registrar.

Financially, IREDA has shown impressive growth with a 58% compound annual growth rate (CAGR) in net profit for FY21-23. Its capital-to-risk weighted asset ratio (CRAR) stood at 21.22% as of March 31, 2022, dropped slightly to 18.82% as of March 31, 2023, and recovered to 20.92% as of September 30, 2023.

The company reported a significant increase in total revenue, up by 21.7% to Rs 3,481.9 crore in FY23, from Rs 2,859.9 crore in FY22. Additionally, its profit after tax surged by 36.4% to Rs 864.62 crore, up from Rs 633.52 crore. The first quarter of FY24 saw a profit of Rs 294.6 crore.

As a government-owned enterprise, IREDA operates under the administrative control of the Ministry of New and Renewable Energy. It is designated as a Mini Ratna (Category – I) company and specializes in providing a range of financial products and services, supporting projects from conception to post-commissioning in the renewable energy sector, including equipment manufacturing and transmission.

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