Indian Renewable Energy Development Agency (IREDA) Files Draft Red Herring Prospectus for IPO

Indian Renewable Energy Development Agency (IREDA) Files Draft Red Herring Prospectus for IPO. Image/iStock

New Delhi, September 11, 2023: The state-owned Indian Renewable Energy Development Agency (IREDA) has taken a significant step by filing its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

Historic IPO

This IPO marks a historic moment as it is the first public issue by a public sector enterprise since Life Insurance Corporation’s (LIC) public offering in May of the previous year.

IPO Details

The IPO will consist of a fresh issue of up to 403.16 million shares and an offer for sale (OFS) of up to 268.78 million equity shares by the President of India, acting through the Ministry of New and Renewable Energy, Government of India. According to the DRHP, the proceeds from the fresh issue will be utilized to bolster IREDA’s capital base, meeting its future capital requirements and enabling onward lending.

IPO Managers

IREDA has appointed IDBI Capital Markets & Securities Ltd., BOB Capital Markets Ltd., and SBI Capital Markets Ltd. as managers to oversee the issue.

IREDA’s Background

Established in 1987 as a Mini Ratna firm, IREDA operates under the administrative control of the Ministry of New and Renewable Energy (MNRE). IREDA is actively engaged in promoting, developing, and extending financial assistance for projects related to new and renewable energy sources as well as energy efficiency and conservation. It stands as India’s largest dedicated green financing non-banking finance company (NBFC), with a diverse investment portfolio worth ₹47,206.66 crore that spans 23 states and five union territories.

IREDA’s Financial Services

IREDA offers a range of financial services, including long-term, medium-term, and short-term loans, top-up loans, bridge loans, takeover financing, loans secured against future cash flows, and lines of credit to other NBFCs. Additionally, it provides non-fund-based products such as letters of comfort, letters of undertaking, payment on order instruments, guarantee assistance schemes, and consultancy services.

Financial Performance

For fiscal year 2023, IREDA reported a 21.75% increase in standalone revenue from operations, amounting to ₹3,481.97 crore. Furthermore, the net profit increased by 36.48% year-on-year to reach ₹864.63 crore. IREDA maintains a robust capital to risk-weighted asset ratio (CRAR), with it standing at 18.82% for fiscal 2023 and at 19.95% for the first three months ending on June 30, 2023.

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