IREDA IPO: State-run NBFC sets price band of Rs 30-32/share for upcoming public offer
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It is the first IPO by a public sector enterprise after Life Insurance Corp’s (LIC) public issue in May last year.
The IPO with a face value of Rs 10 consists of a fresh issue of up to 40.3 crore equity shares and an offer for sale (OFS) of up to 26.8 crore equity shares by the government.
About 50% of the IPO will be available for allocation on a proportionate basis to qualified institutional buyers, 15% for non-institutional investors, and 35% for retail investors. The IPO has up to 1,875,420 equity shares reserved for employees.
The proceeds from the fresh issue will be used for augmenting its capital base to meet its future capital requirements and onward lending.
IREDA has an impressive track record spanning over 36 years in the field of fostering and providing financial support for fresh and sustainable energy (RE) projects, as well as energy efficiency and conservation (EEC) initiatives.
The company is India’s largest dedicated green financing non-banking financial company (NBFC).The organization offers a comprehensive array of financial products (fund and non-fund-based) and associated services, from project inception to post-completion, for RE projects and related activities like equipment manufacturing and transmission.
As of June 2023, its portfolio of outstanding term loans stood at Rs 47,206 crore, reflecting its diverse investment ventures. The company has a geographically diversified portfolio, with term loans outstanding across 23 states and five union territories.
IREDA also extends lines of credit to other NBFCs for lending to RE and EEC projects. Additionally, it offers loans to government entities and financing schemes for RE suppliers, manufacturers, and contractors while non-fund-based products comprise instruments like letters of comfort, letters of undertaking, payment on order instruments, and guarantee assistance schemes.
For the half year ended September 2023, its revenue jumped 47% to Rs 2,320 crore, while profit increased by 41% to Rs 579 crore.
In FY23, the company’s standalone revenue from operations increased 22% to Rs 3,482 crore, primarily due to the growth of its term loans outstanding. Meanwhile, net profit jumped 36% to Rs 865 crore in the same period. The capital-to-risk-weighted asset ratio (CRAR) stood at 18.82% for FY23 and 19.95% for the June quarter.
IDBI Capital Markets, BOB Capital Markets, and SBI Capital are the book-running lead managers and Link Intime India is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE.
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