Indian Renewable Energy Development Agency Limited IPO 2023: Date, Lot Size & Price

Established in March 1987, the Indian Renewable Energy Development Agency Limited (IREDA) stands as a prominent public limited government company, holding the prestigious Mini Ratna (Category - I) status. Under the administrative control of the Ministry of New and Renewable Energy (MNRE), IREDA has consistently played a pivotal role in shaping India's renewable energy landscape.

In the fiscal year 2021-22, IREDA marked a noteworthy achievement, Securing loans amounting to Rs. 23,921.06 crores and disbursing a total of around Rs. 16,070.82 crores

With over 36 years of experience, IREDA has emerged as a seasoned financial institution dedicated to promoting, developing, and providing financial assistance for new and renewable energy projects, along with initiatives in energy efficiency and conservation. Offering a comprehensive suite of financial products and services, IREDA covers the entire project lifecycle, from conceptualization to post-commissioning, spanning renewable energy projects and related activities such as equipment manufacturing and transmission.

Committed to ushering in a greener and more sustainable future, IREDA positions itself as a reliable partner, ensuring clients receive optimal support and guidance throughout their projects.

Indian Renewable Energy Development Agency Ltd-Journey

The company, originally named "Indian Renewable Energy Development Agency Limited," was established in Delhi as a public limited company under the Companies Act, 1956. The Registrar of Companies, Delhi and Haryana, issued the certificate of incorporation on March 11, 1987. Subsequently, the company received a certificate of commencement of business on March 21, 1987, from the Registrar of Companies.

Recognized as a public financial institution under Section 4A of the Companies Act, 1956, the Department of Company Affairs, Ministry of Law, Justice, and Company Affairs, Government of India, formalized this status on October 17, 1995. Additionally, the Reserve Bank of India granted the company a certificate of registration on January 23, 2008, allowing it to operate as a non-banking financial institution without accepting public deposits. Initially classified as an investment and credit company, the company underwent reclassification as an infrastructure finance company on March 13, 2023.

Renewable Energy and  POWER GENERATION INDUSTRY Industry in India

Globally, there's a significant shift in the generation capacity mix, driven by environmental concerns and climate change. India actively participates in sustainable development, making substantial additions to renewable energy capacity. According to the REN21 Renewables 2022 Global Status Report, India stands 4th globally in total renewable energy installed capacity, including wind and solar power. Non-fossil fuel sources contributed to 41% of the total installed generation capacity in 2022.

The renewable power potential in India is vast, estimated at 1,639 GW, far surpassing the current installed capacity of 177 GW as of July 2023. Notably, the installed capacity has grown by 92 GW from Fiscal 2015 to Fiscal 2023, showcasing an impressive Compound Annual Growth Rate (CAGR) of around 10%. This underlines India's commitment to cleaner energy and sustainable practices in line with global environmental objectives.

India's power generation sector is highly diverse, encompassing conventional sources like coal and unconventional ones such as solar and wind. From Fiscal 2019 to Fiscal 2023, electricity generation grew at a 4.2% CAGR, reaching 1,618 BU. Thermal power dominates, constituting 75% of consumption, with coal-based plants leading. Renewables, including solar and wind, increased their contribution from 19.1% in Fiscal 2019 to 23% in Fiscal 2023, signaling a shift towards cleaner energy.

Factors governing the Power Demand in India

• Low per capita consumption signals latent demand; GDP and population growth fuel increased need.

• Urbanization spurs job and infrastructure growth while rising urban incomes boost power demand.

• Emphasis on wind-solar hybrid ensures efficient, round-the-clock power with stable output.

• Government initiatives like Power for All and SAUBHAGYA aim to provide constant electricity, enhancing satisfaction and stimulating economic activities.

IREDA Ltd IPO Details

The IREDA Limited IPO share price set at Rs. 30 to Rs. 32 per share, opens for subscription on November 21, 2023, and closes on November 23, 2023. Allotment is anticipated by November 29, 2023, and the listing on BSE and NSE is scheduled for December 4, 2023. The minimum lot size for an application is 460 shares, requiring a minimum investment of Rs. 14,720 for retail investors. For sNII, the minimum lot size is 14 lots (6,440 shares), amounting to Rs. 206,080, and for bNII, it is 68 lots (31,280 shares), totaling Rs. 1,000,960.

Purpose of  IREDA Limited  IPO Issue

• Enhancing the capital base to fulfill future capital needs and facilitate onward lending.

• Anticipating benefits from listing Equity Shares on Stock Exchanges, aiming to boost the brand image among current and prospective customers, and establishing a public market for Equity Shares in India.

IREDA Limited  IPO Issue Key Dates:

IREDA Limited IPO Issue Lot Size

IREDA Limited IPO Reservation

Indian Renewable Energy Development Agency Limited Investment Potential:

Qualitative Factors:

• Consistent Growth Track Record: Demonstrates a consistent history of growth, emphasizing high-quality assets, a diversified asset portfolio, and stable profitability.

• Strategic Government Role: Plays a strategic role in Government of India initiatives within the Renewable Energy sector, showcasing commitment to national objectives.

• Trusted Brand in Expanding Sector: Established and trusted brand operating in a rapidly expanding sector, reflecting reliability and credibility.

• Digitalized Borrower-Centric Processes: Utilizes digitized processes for borrower-centricity and operational scalability, ensuring efficiency with a nationwide presence.

• Robust Credit Appraisal and Risk Management: Implements a comprehensive data-based credit appraisal process and risk-based pricing. Ensures effective post-disbursement project monitoring and recovery processes.

• Diverse and Cost-Effective Funding Sources: Accesses diversified and cost-effective long-term sources of borrowing with a judicious approach to asset-liability management.

• Experienced Leadership: Boasts an experienced senior management team with in-depth sector expertise, complemented by a professionally qualified employee base.

Quantitative Factors:

Key Performance Indicator

Risk Factors:

• Asset Portfolio Management: The business faces a risk to its financial performance if it cannot effectively manage the quality of its growing asset portfolio and control non-performing assets.

• NPA Increase: There's a potential for an increase in Non-Performing Assets (NPAs), driven by factors such as borrowers' inability to repay loans due to issues like delayed payments from state electricity distribution companies, tariff and regulatory-related challenges, force majeure events (e.g., droughts, floods), and delays in project implementation and commissioning.

• Interest Rate Volatility: The business is susceptible to the adverse effects of interest rate volatility. This volatility can impact hedging instruments, net interest income, and net interest margin, thereby affecting overall business operations.

• Credit Rating Downgrades: Previous downgrades in the company's credit ratings pose a risk. Any future credit rating downgrade could have implications for the business and its financial conditions.

In conclusion, the Indian Renewable Energy Development Agency Limited (IREDA) IPO offers a compelling investment in India's growing renewable energy sector. 

IREDA boasts robust factors like consistent growth, strategic government involvement, and a trusted brand. Digitalized processes and diverse funding sources add to its appeal. However, potential risks include asset portfolio management and credit rating downgrades.

Ranked 4th globally in renewable energy capacity, the IRDEA Ltd IPOshare price of Rs. 30 to Rs. 32 per share, opens on November 21, 2023, and closes on November 23, 2023. The anticipated listing on BSE and NSE is on December 4, 2023.

With India's shift to cleaner energy, IREDA's IPO aligns with sustainable goals. Investors have the opportunity to participate in India's green energy future by considering the Indian Renewable Energy Development Agency Limited IPO share price offering.

Frequently Asked Questions

1. What is the IRDEA Ltd IPO share price?

The Indian Renewable Energy Development Agency Limited IPO share price is set at Rs. 30 to Rs. 32 per share.

2. When does the subscription period for IRDEA Ltd IPO start and end?

The IRDEA Ltd IPO share price of Rs. 30 to Rs. 32 per share, opens for subscription on November 21, 2023, and closes on November 23, 2023.

3. When is the listing date for the Indian Renewable Energy Development Agency Limited IPO?

The anticipated listing of the Indian Renewable Energy Development Agency Limited IPO on BSE and NSE is scheduled for December 4, 2023.

4. What is the minimum investment required for retail investors in IRDEA Ltd IPO?

The minimum lot size for an application is 460 shares, requiring a minimum investment of Rs. 14,720 for retail investors.

5. What are the key purposes of the IRDEA Ltd IPO issue?

The company plans to utilize the net proceeds to enhance the capital base for future capital needs and facilitate onward lending. Additionally, it anticipates benefits from listing equity shares on stock exchanges to boost the brand image among current and prospective customers and establish a public market for equity shares in India.

 

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