IREDA Shares Nears All-Time High on Renewed Energy Partnership

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IREDA Shares Nears All-Time High on Renewed Energy Partnership

By Aayush Khanna

Indian Renewable Energy Development Agency Ltd (NS: INAR ) (IREDA) is going against the grain with good surge of over 3% on 17 January 2024. This surge follows the company's recent collaboration announcement with Indian Overseas Bank (NS: IOBK ) (IOB) to jointly finance renewable energy projects in India.

The partnership, inked in the presence of IREDA Chairman Pradip Kumar Das and IOB CEO Ajay Kumar Srivastava, establishes a framework for co-lending and loan syndication for a diverse range of renewable energy projects across the nation. IREDA aims to streamline processes related to loan syndication, underwriting, and the management of Trust and Retention Account for its borrowers.

Building on existing collaborations with financial institutions like Bank of Baroda (NS: BOB ), Bank of India (NS: BOI ), Union Bank of India (NS: UNBK ), India Infrastructure Finance Company Limited, and Bank of Maharashtra (NS: BMBK ), this partnership enhances IREDA's strategic positioning in the renewable energy financing landscape.

IREDA, a non-banking financial institution under the Ministry of New and Renewable Energy, plays a pivotal role in promoting and financing projects related to renewable energy sources. Market analysts, while foreseeing robust loan growth for IREDA amid surging demand for renewable energy, caution that earnings growth might not mirror the loan growth due to margin pressures and normalized credit costs.

Despite a recent 'sell' rating from Phillip Capital, IREDA's impressive market performance positions it as a potential entrant into the MSCI Smallcap index. The official announcement is anticipated on 13 February 2024, with adjustments scheduled for 29 February 2024.

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