IREDA IPO Day 1: The Initial Public Offering of Indian Renewable Energy Development Agency (IREDA) opens for subscription in the present day (November 21). The concern will shut on Thursday, November 23.Indian Renewable Energy Development Agency (IREDA) is India’s first PSU IPO to hit the market in 2023 and the primary after LIC’s inventory market debut in May 2022. LIC at present is India’s largest IPO.
IREDA IPO Lot Size
Investors can bid for at least 460 fairness shares and in multiples of 460 fairness shares thereafter. Hence, the minimal funding by retail buyers could be Rs 13,800 at a lower cost band of Rs 30. At the higher finish, the bidding quantity will improve to Rs 14,720.
IREDA IPO Offer Details
IREDA goals to boost Rs 2,150.21 crore through the IPO. The value band for the general public supply, which is able to shut on November 23, has been fastened at Rs 30-32 per share. The firm will use the web proceeds to enhance the capital base to satisfy future capital necessities and onward lending. IREDA expects to obtain the advantages of itemizing the fairness shares on the inventory exchanges.
IREDA IPO: Financials
IREDA recorded a 58 p.c CAGR progress in internet revenue throughout FY21-FY23. The capital-to-danger weighted asset ratio (CRAR) was 21.22 p.c as of March 31, 2022, 18.82 p.c as of March 31, 2023, and 20.92 p.c as of September 30, 2023. Total income rose 21.7 p.c to Rs 3,481.9 crore in FY23 from Rs 2,859.9 crore in FY22. Profit after tax grew 36.4 p.c to Rs 864.62 crore from Rs 633.52 crore in the identical interval. Profit got here in at Rs 294.6 crore in Q1FY24.
About IREDA
The firm is into selling, creating and lengthening monetary help for brand new and renewable power initiatives, and power effectivity and conservation initiatives, providing a complete vary of economic merchandise and associated providers, from challenge conceptualisation to put up-commissioning, for renewable power initiatives and different worth chain actions, comparable to gear manufacturing and transmission.
It can also be India’s largest pure-play inexperienced financing NBFC in India. The firm has a geographically diversified portfolio, with time period loans excellent throughout 23 states and 5 Union Territories as of September 30, and has 4 strategically positioned branches in Mumbai, Hyderabad, Chennai, and Bhubaneshwar to maximise geographical vary by way of territory.
IREDA IPO GMP Today
According to market observers, unlisted shares of IREDA had been buying and selling Rs 7 greater within the gray market as in contrast with its concern value. The Rs 7 gray market premium or GMP means the gray market is anticipating a 21.88 per cent itemizing acquire from the general public concern. The GMP relies on market sentiments and retains altering.
‘Grey market premium’ signifies buyers’ readiness to pay greater than the problem value.
IREDA IPO: Should You Subscribe?
As a Mini Ratna enterprise, IREDA holds a pivotal place within the authorities’s renewable power initiatives by financing such initiatives. The firm’s steady operations are supported by its entry to lengthy-time period financing sources. Also, the corporate has demonstrated constant monetary progress, stated Shivani Nyati, Head of Wealth at Swastika Investmart.
However, Nyati famous that IREDA’s enterprise stays vulnerable to rate of interest fluctuations. Additionally, its reliance on the renewable power sector introduces a level of trade-particular danger, the analyst stated.
“The IPO is priced at a P/BV (price-book value) of 1.23 times, based on a NAV of 25.98, indicating a fair valuation. Thus, considering all these factors, we will assign Subscribe rating to this IPO,” the brokerage stated.
According to Nirmal Bang, IREDA’s positioning as the most important pure-play inexperienced financing NBFC in India locations it among the many only a few gamers who’re nicely positioned to capitalise on the fast progress within the Renewable Energy sector
“On the back of a low base, demonstrated track record of high growth, improvement in asset quality and cheap valuations at 1.1 times trailing P/B (post issue), we rate the issue as ‘Subscribe’,” the brokerage stated.
