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Benzinga - Shares of IREDA (NS:INAR) were gaining on Thursday after the renewable energy firm received approval to raise funds and dilute the government’s stake in the firm.
What Happened: IREDA has secured approval from the Union government to raise funds through a qualified institutional placement (QIP), allowing the state-owned company to issue fresh equity to institutional investors such as banks and mutual funds. This will enable IREDA to reduce the government's stake while raising capital to support its operations.
Previously, IREDA's board had approved a plan to raise ₹4,500 crore through multiple potential routes, including a follow-on public offer (FPO), rights issue, or preferential issue.
Raising Cash: The company has now informed exchanges that it will proceed with the QIP after receiving the green light from the Department of Investment and Public Asset Management (DIPAM), following approval from a high-level government committee.
The alternative mechanism, a decision-making body, has allowed IREDA to dilute the government's shareholding by up to 7% in one or more stages. However, even after the QIP, the government will retain its position as the majority shareholder in the company.
The fundraising comes at a time when India aims to achieve an ambitious target of 500 gigawatts of renewable energy capacity by 2030, requiring an annual addition of 50 gigawatts. IREDA's role in financing renewable energy projects makes this capital infusion particularly significant for the sector.
Price Action: IREDA’s share price was up 2.64% at ₹233.39 in early morning trade on Thursday. The stock has climbed over 123% so far this year.
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