In Short : IREDA is considering a follow-on public offer (FPO) to boost funding for renewable energy projects. This move aims to raise capital to support the expansion of renewable energy initiatives, reinforcing IREDA’s commitment to promoting sustainable energy development in India.
In Detail : IREDA launched its initial public offering (IPO) in December 2023 and debuted on Dalal Street after two failed attempts over the last decade
Public sector non-banking financial company (NBFC) Ireda Limited will issue a follow-on public offering (FPO) during the current financial year to boost its equity capital. The NBFC, which is under the aegis of the Ministry of New and Renewable Energy (MNRE), is aiming to raise Rs 24,200 crore in this financial year.
Ireda launched its IPO in December 2023 and debuted on Dalal Street after two failed attempts in the past decade.
It is currently the only public sector NBFC focused on the green energy sector.
PK Das, chairman and managing director, Ireda said: “We feel we would require more equity capital. Raising debt is not a problem for us. The project size in green energy is getting bigger and we intend to support the sector’s growth. For this, we believe that an FPO is the route to raise more equity capital.”
Das did not disclose the FPO amount but indicated it is in sync with the growth prospects of the company and the sector.
Das said the company is looking at loan disbursement of more than Rs 30,000 crore during this financial year. During 2023-24, Ireda disbursed loans worth Rs 25,089 crore. Last month, Ireda’s board approved a borrowing plan of Rs 24,200 crore during 2024-25.
This includes fundraising through bonds, perpetual debt instruments (PDI), term loans, commercial papers, and external commercial borrowings, the company’s regulatory filing said.
Das said the company’s focus remains on the domestic market. For widening the scope, he said they have requested the government to include them in the capital gains exemption bond under Section 54EC of the Income Tax, 1961. Its peers in the energy sector lending – state-owned PFC Ltd and REC Ltd are listed under Section 54EC.
“There is a lot of potential in the Indian bond market and we think we can tap it. MNRE will also write to the finance ministry requesting our inclusion. We are a 100 per cent green company and well suited for 54EC,” Das said.
Ireda incorporated a subsidiary in Gift City in Gujarat. Das said the branch would engage with green energy sectors, which have the export potential as the company is looking at foreign currency lending.
He added that solar manufacturing and the green hydrogen manufacturing ecosystem are two top targets. For retail sectors like solar rooftops, Das said that Ireda would do joint lending with other NBFCs or banks.
The net worth of the Ireda grew 44.2 per cent over the last financial year to reach Rs 8,559.43 crore, as of March 31, 2024.
