IREDA IPO Gets Subscribed 1.21 Times On First Day Of Booking

Non-institutional investors purchased 1.22 times their allocated share, while retail investors purchased 1.2 times their quota in the IREDA IPO
IREDA logo
IREDA logoWikimedia Commons

Subscriptions to the Indian Renewable Energy Development Agency's (IREDA) initial public offering can be made from Tuesday, 21 November. The deadline for this issue is Thursday, 23 November.

The issue has received bids for 56.86 crore shares against the offer size of 47.09 crore on 21 November, the first day of bidding, and has been subscribed 1.21 times thus far.

Non-institutional investors purchased 1.22 times their allocated share, while retail investors purchased 1.2 times their quota.

The government of India is offering 26.88 crore shares for sale in addition to issuing 40.32 crore new shares as part of the 67.19-crore initial public offering.

The company has raised Rs 643 crore from anchor investors in advance of the IPO.

In addition to an Offer for Sale of 26 crore shares with a face value of Rs 10 apiece, IREDA's IPO consists of a new issue of 40.3 crore shares. The offer has a fixed price range of Rs 30 to Rs 32 per share, and investors are able to bid in lots of 460 shares or multiples of that amount, according to a report by CNBC-TV 18.

The post-issue implied market capitalization of the company at the present price band would be between Rs 8,063 crore and Rs 8,601 crore.

Right now, IREDA is India's biggest pure-play NBFC for green financing. Any organised funding that supports international efforts to tackle climate change and the shift to a low-carbon economy is referred to as "green financing."

Additionally, the company's portfolio is diversified because no state accounts for more than 16 per cent of total loans, which keeps a state or regional concentration at bay.

However, the business has low Net Interest Margins (NIMs) and poor return ratios. Also, compared to peers like Rural Electrification Corporation Limited (REC) and Power Finance Corporation Ltd (PFC), its spreads are lower. In comparison to REC and PFC, the company's Provision Coverage Ratio is also lower.

Because IREDA has written off more than it has slipped, its asset quality has improved. This demonstrates how feeble the recuperation mechanism is.

Additionally, it does not adhere to the financing terms of foreign lines of credit, such as those with the Asian Development Bank, with regard to maintaining their levels of gross non-performing assets.

IREDA would seek to capitalise on the significant prospects found in the renewable energy industry. According to a recent research, $223 billion in funding will be needed over the next eight years just to reach the 2030 projections for solar and wind power.

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