During Thursday’s trading session, the shares of India’s largest pure-play green financing NBFC surged 4.4 percent to Rs. 237.5 on BSE, after receiving approval to raise funds of up to Rs. 4,500 crores, leading the government to dilute up to 7 percent equity in the company.
With a market capitalisation of Rs. 61,052.6 crores, at 12:14 p.m., the shares of Indian Renewable Energy Development Agency Ltd (NS:INAR) (IREDA) were trading in the green at Rs. 229.3, up by nearly 0.8 percent, as against its previous closing price of Rs. 227.5.
Is IREDA a buy or sell? What is its Fair Value? What are the company's health parameters? What are the positive and negative factors driving the company -- ProTips? Know all the answers on the company's overview page here.
What’s the News:
As per the latest regulatory filings with the stock exchanges, IREDA has received approval from the Department of Investment and Public Asset Management (DIPAM) to raise up to Rs. 4,500 crores through Qualified Institutional Placement (QIP).
This fundraising, sanctioned by the Alternative Mechanism following recommendations from a High-Level Committee, will lead to a dilution of the government’s stake in IREDA by up to 7 percent of the company’s post-issue paid-up equity, as a result of the fresh equity share issue.
The capital infusion considered various fundraising options, including a Further Public Offer (FPO), Rights Issue, or Preferential Issue.
The proposal for this fundraise was first presented to the company’s Board of Directors on August 21st.
Previous News:
On 21st June, IREDA informed the stock exchanges regarding successfully raising Rs. 1,500 crores through the issuance of bonds.
The bond issuance consisted of a base issue of Rs. 500 crore, along with a green shoe option of Rs. 1,000 crore, which received a strong response from investors, resulting in oversubscription by 2.65 times.
The funds were raised at an annual interest rate of 7.44 percent for a tenure of 10 years and 2 months.
This capital raise will enhance IREDA’s efforts to finance green energy projects, supporting India’s target of achieving 500 GW of non-fossil fuel installed capacity by 2030, as highlighted by the company’s Chairman & Managing Director.
Additionally, the company received the Navratna status from the Department of Public Enterprises (DPE) on 26th April 2024.
Financials:
The company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 32 percent from Rs. 1,143 crores in Q1 FY24 to Rs. 1,510 crores in Q1 FY25.
Similarly, its net profit increased during the same period from Rs. 295 crores to Rs. 384 crores, indicating a rise of nearly 30.2 percent.
In Q1 FY25, the company’s net NPA decreased to Rs. 593 crores from Rs. 747 crores in Q1 FY24, reflecting a 21 percent decline. Similarly, gross NPA saw a 5 percent reduction, dropping from Rs. 1,456 crores to Rs. 1,385 crores during the same period.
Additionally, IREDA’s outstanding loan book grew significantly, reaching Rs. 63,207 crores in Q1 FY25, a 34 percent increase compared to Rs. 47,207 crores in Q1 FY24.
Stock Performance
The stock has delivered multibagger returns of nearly 281.7 percent of returns in one year, and around 77 percent of positive returns in the last six months. So far in 2024, the shares of IREDA have given multibagger returns of about 118.8 percent.
About the Company:
Indian Renewable Energy Development Agency Limited (IREDA) is a Mini Ratna (Category – I) Government of India enterprise under the administrative control of the Ministry of New and Renewable Energy (MNRE).
The company is registered with the RBI as a non-deposit-taking NBFC, and is engaged in promoting, developing and extending financial assistance for setting up projects relating to new and renewable sources of energy and energy efficiency/conservation. IREDA owns a 50 MW Solar project situated at Kasargod, Kerala.
Written by Shivani Singh
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