IREDA eyes FPO to support future capital requirements

23 May 2024 CW Team

In a recent media interaction, Pradip Kumar Das, Chairman and Managing Director of IREDA, elaborated on the company's plans to bolster its financial resources in the upcoming fiscal year. With the renewable energy sector witnessing an increasing demand for funding, IREDA aims to raise additional equity capital to accommodate the growing project sizes in the green energy domain.

Das emphasised the significance of an FPO as a means to augment equity capital, underscoring the need for approval from the union cabinet to proceed with the proposal. The company eyes a fundraising target of Rs 242 billion for the current financial year, with favourable periods identified between September to November and February.

Following the success of its initial public offering (IPO) last year, which raised Rs 21.5 billion, IREDA is now exploring avenues to further strengthen its financial base. Considering the oversubscription of its IPO by about 39 times, the company is optimistic about the potential of its forthcoming fundraising initiatives.

Apart from the FPO, IREDA intends to explore raising funds through perpetual debt instruments, diversifying its financing options to support its lending activities for renewable energy ventures. This strategic approach aligns with the company's mission to facilitate the growth of the renewable energy sector in India.

Furthermore, IREDA's recent attainment of Navratna status highlights the enhanced stature and credibility in the financial landscape. The company is also gearing up to issue bonds eligible for exemption under Section 54EC of the Income Tax Act, enhancing its financing capabilities.

Additionally, IREDA has established a wholly-owned subsidiary, IREDA Global Green Energy Finance IFSC, in the International Financial Services Centre (IFSC) at GIFT City, Gujarat. This offshore platform will facilitate competitive funding opportunities and aid in mitigating hedging costs, further strengthening IREDA's financial resilience.

With a robust net worth of approximately Rs 85.59 billion and a substantial loan book of around Rs 596.98 billion, IREDA has been actively disbursing funds to support renewable energy projects. The company disbursed Rs 250.89 billion in FY24, marking a significant increase from previous years.

Looking ahead, Das emphasized the importance of Green Taxonomy in mobilizing funds for green energy initiatives, highlighting its potential to raise around Rs 25000 billion for such projects by 2030. IREDA remains committed to driving sustainable financing solutions to propel the renewable energy transition in India. (Source: Economic Times)

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State-owned Indian Renewable Energy Development Agency (IREDA) is gearing up to enhance its financial capacity to support renewable energy projects through a strategic move involving a follow-on public offer (FPO) and perpetual debt issuance. In a recent media interaction, Pradip Kumar Das, Chairman and Managing Director of IREDA, elaborated on the company's plans to bolster its financial resources in the upcoming fiscal year. With the renewable energy sector witnessing an increasing demand for funding, IREDA aims to raise additional equity capital to accommodate the growing project sizes in the green energy domain. Das emphasised the significance of an FPO as a means to augment equity capital, underscoring the need for approval from the union cabinet to proceed with the proposal. The company eyes a fundraising target of Rs 242 billion for the current financial year, with favourable periods identified between September to November and February. Following the success of its initial public offering (IPO) last year, which raised Rs 21.5 billion, IREDA is now exploring avenues to further strengthen its financial base. Considering the oversubscription of its IPO by about 39 times, the company is optimistic about the potential of its forthcoming fundraising initiatives. Apart from the FPO, IREDA intends to explore raising funds through perpetual debt instruments, diversifying its financing options to support its lending activities for renewable energy ventures. This strategic approach aligns with the company's mission to facilitate the growth of the renewable energy sector in India. Furthermore, IREDA's recent attainment of Navratna status highlights the enhanced stature and credibility in the financial landscape. The company is also gearing up to issue bonds eligible for exemption under Section 54EC of the Income Tax Act, enhancing its financing capabilities. Additionally, IREDA has established a wholly-owned subsidiary, IREDA Global Green Energy Finance IFSC, in the International Financial Services Centre (IFSC) at GIFT City, Gujarat. This offshore platform will facilitate competitive funding opportunities and aid in mitigating hedging costs, further strengthening IREDA's financial resilience. With a robust net worth of approximately Rs 85.59 billion and a substantial loan book of around Rs 596.98 billion, IREDA has been actively disbursing funds to support renewable energy projects. The company disbursed Rs 250.89 billion in FY24, marking a significant increase from previous years. Looking ahead, Das emphasized the importance of Green Taxonomy in mobilizing funds for green energy initiatives, highlighting its potential to raise around Rs 25000 billion for such projects by 2030. IREDA remains committed to driving sustainable financing solutions to propel the renewable energy transition in India. (Source: Economic Times)

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