IREDA shares surge 5% on green energy financing pact with Indian Overseas Bank

Shares of Indian Renewable Energy Development Agency (IREDA) surged as much as 5.06% to ₹125.55 apiece on the BSE, a day after the state-owned company signed a memorandum of understanding with Indian Overseas Bank for collaborative efforts in co-lending and loan syndication for renewable energy projects across the country.

The scrip opened lower at ₹118.25 as against the previous closing price of ₹119.50. The stock gained momentum and surged over 5%.

At 1:22 pm, the share price of the company was trading 2.18% higher at ₹122.10. In contrast to this, the broader BSE Sensex was down 1,416.33 or 1.94% lower at 71,712.44.

Currently, the share price of the company was trading 4.07% lower than the 52-week high of ₹127.50, which the company touched on January 16 this year. The company touched a 52-week low of ₹49.99 on November 29 last year. The company’s market capitalisation stood at ₹32,911.68 crore with more than 93.79 lakh shares exchanging hands on the BSE, as against the two-week average of 97.09 lakh shares.

According to the regulatory filing by the power-sector-focused non-banking financial company (NBFC), the MoU aims to streamline loan syndication and underwriting processes, management of trust and retention account (TRA) for IREDA borrowers, and work towards fixed interest rates over three to four years for IREDA borrowings. The MoU also includes provisions for co-lending and co-origination support for all renewable energy projects, says the company.

The state-owned company has also entered into partnerships with the Bank of Baroda, Bank of India, Union Bank of India, India Infrastructure Finance Company Limited and Bank of Maharashtra for co-lending and loan syndication of renewable energy projects across the country.

In December last year, IREDA’s board approved fundraising via the issuing of taxable bonds on a private placement basis. The company aims to raise up to ₹2,000 crore by unsecured, redeemable, non-convertible, non-cumulative, taxable, bonds. It plans to raise bonds worth ₹500 crore at the base issue, with a green shoe option of up to ₹1,500 crore, aggregating to ₹2,000 crore. This is part of the mini-ratna company’s ₹26,000 crore borrowing programme for the financial year 2023-24, which was approved by the board on April 25, 2023.

IREDA raised ₹2,150 crore from its IPO, which was a combination of a fresh issue of ₹1,290.13 crore and an offer for sale of ₹860.08 crore by existing shareholders. Established in 1987, IREDA, which comes under the Ministry of New and Renewable Energy (MNRE), is the first PSU to list on stock exchanges after a long gap of 17 months post LIC's market debut in May 2022. The company is engaged in promoting, developing and extending financial assistance for setting up projects relating to new and renewable sources of energy and energy efficiency.