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Stellar debut: IREDA lists at a 56% premium and opens at Rs 50 per share on the BSE

29 November 20235 mins read by Angel One
The total issue size was Rs 2,150 crore, constituting both the fresh issue and an OFS. The company intends to use these funds to meet future capital requirements and for onward lending.
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The Indian Renewable Energy Development Agency Limited (IREDA) is a government-owned public limited company with the prestigious status of being a Mini Ratna enterprise and debuted on the Indian stock market today.

Upon its debut on the BSE, the stock opened at Rs 50 per share, reflecting an impressive 56% premium compared to the issue price of Rs 32 per share from its initial public offering. Conversely, on the NSE, the stock debuted at Rs 50 per share, indicating a 56% premium.

As of the current moment, the stock is being traded at Rs 53.72 per share on the BSE, having reached intraday highs and lows of Rs 55.36 and Rs 49.99, respectively. The present market capitalisation of the company stands at Rs 14,403 crore.

The book-running lead managers for the IPO were IDBI Capital Market Services Limited, BOB Capital Markets Limited, and SBI Capital Market Limited. Additionally, Link Intime India Private Limited is the issue’s registrar.

IPO Proceeds

The company plans to allocate the net proceeds for the following purposes, Firstly, strengthening the capital base to adequately address future capital necessities and facilitate further lending activities. Moreover, the company is anticipating advantages from the listing of Equity Shares on Stock Exchanges, aiming to enhance the brand’s visibility among both current and prospective customers.

Company profile

The Indian Renewable Energy Development Agency Limited (IREDA) is a government-owned public limited company and holds the prestigious status of being a Mini Ratna enterprise. Under the administrative oversight of the Ministry of New and Renewable Energy (MNRE), IREDA achieved remarkable milestones in the FY22, recording its highest-ever loan sanctions of approximately Rs 23,921.06 crore and loan disbursements totalling around Rs 16070.82 crores.

With over 36 years of dedicated experience, IREDA stands as a seasoned financial institution actively involved in promoting, developing, and offering financial support for new and renewable energy projects. Additionally, it extends its services to energy efficiency initiatives and conservation projects. The company provides a wide spectrum of financial products and services covering the entire project lifecycle, from initial conceptualization to post-commissioning phases. Its offerings cater not only to renewable energy projects but also encompass various value chain activities such as equipment manufacturing and transmission.

Subscription details 

On November 23, 2023, the final day of the IPO window, the IPO witnessed an impressive response, especially when compared to other IPOs recently listed, with a subscription rate of 38.80 times. The public issue received mixed interest, with the retail category being subscribed 7.73 times, the QIB category achieving a subscription rate of 104.57 times, and the NII category reaching a subscription rate of 24.16 times.

The company attracted Rs 643.26 crore from various anchor investors by allocating 20.10 crore equity shares at Rs 32 per share. The complete lock-in period for these anchor investors ends on April 3, 2024.

The IPO price range was set between Rs 30 and Rs 32, with a face value of Rs 10 per share and a lot size of 460 shares. The total size of the company’s IPO was Rs 2150 crore, and the final share issue price was fixed at Rs 32 each.

Financial Performance 

Particulars FY22 (Rs Cr)  FY23 (Rs Cr)  Q2 FY24 (Rs Cr) 
Revenue 2874.16 3483.04 2320.46
Net Profit / (Loss) 633.53 864.63 579.32
Total Assets 36708.40 50446.98 51208.36
Net Worth 5268.11 5935.17 6580.61
Reserve and Surplus 1776.05 2310.96 2550.36

Conclusion 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely with the intention of capitalising on listing gains have already gained an impressive 56% return over its final issue price on the listing day itself. Investors who applied for the IPO for listing gains may consider closing their positions.

Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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