Ireda to float FPO of Rs 4,500 crore; firm to take nod in meeting – EQ
In Short : IREDA plans to launch a follow-on public offer (FPO) worth ₹4,500 crore. The firm will seek approval for this move in an upcoming meeting. The funds raised from the FPO will likely be used to strengthen its capital base and support its renewable energy financing initiatives.
In Detail : Public sector non-banking financial company (NBFC) Ireda Limited will issue a follow-on public offering (FPO) of Rs 4,500 crore.
The company will convene a meeting of the board of directors on August 29 to get the approval for the same, it informed the exchanges.
“This is to inform that board meeting of Ireda Ltd is scheduled to be held on Thursday, August 29, 2024, inter-alia, to consider and approve the proposal for raising of funds by way of equity share capital for an amount aggregating of upto Rs 4,500 crore in one or more tranches through Further Public Offer (FPO) / Qualified Institutional Placement (QIP) / Right Issue / Preferential Issue or any other permitted mode or a combination, as may be deemed appropriate, subject to the Statutory or Govt. Approval,” said the company’s announcement on the exchanges on Wednesday.
The NBFC, which is under the aegis of ministry of new and renewable energy (MNRE), is aiming to raise Rs 24,200 crore in 2024-25. The FPO is in line with its plan to increase its equity capital. Ireda launched its IPO in December 2023 and debuted on Dalal Street after two failed attempts over the last decade. Ireda is currently the only listed public sector NBFC which is solely focused on green energy sectors.
P K Das, chairman and managing director, Ireda, had told Business Standard in May that the company would require more equity capital to align with its growth plans. “The project size in green energy is getting bigger and we intend to support the sector’s growth. For this, we believe an FPO is the route to raise more equity capital,” he had said.
Ireda is looking at loan disbursal of more than Rs 30,000 crore during this financial year. During 2023-24, Ireda disbursed loans worth Rs 25,089 crore. In April 2024, Ireda’s board had 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 (ECB), regulatory filing by the company in April stated.
IREDA had also requested the Centre 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 in 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 had said in May.
Ireda recently incorporated a subsidiary in Gift City, Gujarat. The net worth of Ireda grew by 44.2 per cent over the last financial year to reach Rs 8,559.43 crore as on March 31, 2024.
