Ireda to list in FY24- Govt to sell 10%, firm to issue 15% fresh equity

Ireda to list in FY24: Govt to sell 10%, firm to issue 15% fresh equity

State-run Indian Renewable Energy Development Agency (Ireda) is likely to come out with an initial public offering (IPO) in FY24. The listing will include offloading of a 10% stake by the government and issuance of a 15% fresh equity by the firm, a move that will help the renewable energy project financier to boost its capacity and growth.

The IPO will help in unlocking the value of the government’s investment in the firm and in mobilising fresh funds to grow business in this niche segment without depending on the exchequer, an official told FE.

On March 17, the Cabinet Committee on Economic Affairs (CCEA) approved the Ireda IPO.

This decision supersedes the earlier CCEA decision taken in June 2017 for allowing Ireda to issue 139 million fresh equity shares of Rs 10 each to the public on a book-building basis through IPO. The latest decision was necessitated by a change in capital structure following an infusion of capital to the tune of Rs 1,500 crore by the government in March 2022.

Ireda is currently a wholly-owned government of India enterprise. It was incorporated in 1987 and is engaged in the financing of renewable energy (RE) and energy efficiency (EE) projects in India.

The company as of date has financed more than 3,068 RE projects with a cumulative loan sanction and disbursement to the tune of Rs 1.42 trillion and Rs 0.9 trillion, respectively, and has supported RE capacity addition of 19,502 MW in the country. The company’s net profit rose 50% on year to Rs 611 crore in the first nine months of FY23.

It is registered as a non-banking financial company (NBFC) with the Reserve Bank of India. The government, in line with the pledge made as a part of the Nationally Determined Contribution (NDC) in the Paris Accord on Climate Change, has set the targets of achieving 175 GW of installed RE capacity by 2022 and 500 GW by 2030. Ireda has a pivotal role to play in the achievement of RE targets.

The implementation and operation of RE/EE projects by Ireda as per their business plan in line with the RE targets of the Centre will also help in creating direct and indirect employment opportunities for both skilled and unskilled manpower.