The Cabinet Committee on Economic Affairs (CCEA) on Friday approved the proposal for listing its renewable energy (RE) funding arm, IREDA, on stock exchanges through an initial public offer (IPO).
Incorporated in 1987, the Indian Renewable Energy Development Agency (IREDA) is an NBFC engaged in financing RE and energy efficiency (EE) projects in India. There will be a part sale of the government’s stake in the NBFC and to raise funds for IREDA through issue of fresh equity shares. The Department of Investment and Public Asset Management (DIPAM) will drive the listing process, the Power Ministry said in a statement.
To unlock value
The IPO will help in unlocking the value of government’s investment on one hand and on the other, it will provide an opportunity to the public to acquire stake in the national asset and draw benefits therefrom, it added.
Besides, it will help IREDA in raising a part of its capital requirement for meeting growth plans without depending on the public exchequer, and improve governance through greater market discipline and transparency arising from listing requirements and disclosures.
Supersedes earlier decision
“This decision supersedes earlier CCEA decision taken in June 2017 for allowing IREDA to issue 13.90 crore fresh equity shares of ₹10 each to the public on book building basis through IPO. The instant decision has been necessitated due to change in capital structure following infusion of capital to the tune of ₹1,500 crore by the government in March 2022,” the Ministry explained.
The Miniratna PSU’s implementation and operation of RE and EE projects, as per their business plan, is in line with the RE targets of the government and will help in creating direct and indirect employment opportunities for both skilled and unskilled manpower.
The company has financed more than 3,068 RE project loan accounts with cumulative loan sanction and disbursement to the tune of ₹1,41,622 crore and ₹90,037 crore, respectively, and has supported RE capacity addition of 19,502 megawatts (MW) in the country.
IREDA posted a profit after tax (PAT) of ₹200.75 crore in Q3 FY23, which is 87 per cent higher compared to ₹107.19 crore in Q3 FY22. Total income grew 17 per cent y-o-yto ₹869 crore.
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