Key Points of IREDA IPO Approval by the Union Government:
- IREDA is set to go public after the Indian government approved its IPO by selling its part stake in the company.
- The Department of Investment and Public Asset Management (DIPAM) will lead the listing process, following the government’s initial approval in 2017 and the recent capital infusion of Rs 1,500 crore.
- The capital infusion was aimed at enhancing IREDA’s net worth, funding additional renewable energy financing, and improving the capital-to-risk weighted assets ratio (CRAR).
- The IPO will unlock the value of the government’s holding and allow investors to acquire a stake in the company, while helping IREDA secure capital for its growth plans without depending on the public exchequer.
- The listing will improve governance through greater market discipline and transparency arising from listing requirements and disclosures.
- IREDA is currently a wholly-owned government mini-ratna CPSE, registered as an NBFC with the RBI, and is engaged in financing renewable energy and energy efficiency projects in India.
- IREDA’s IPO is in line with the government’s ambitious green energy targets of achieving 500 GW of installed renewable energy capacity by 2030. In the December quarter, IREDA’s profit rose by 87% to Rs 201 crore, while its total income increased by 17% to Rs 869 crore from the previous year.
Details of IREDA IPO Approval by the Union Government:
IREDA is set to go public, following the Union Government’s approval to float its IPO. Here’s what you need to know:
The government has approved the IPO by selling its part stake in IREDA. The Department of Investment and Public Asset Management (DIPAM) will drive the listing process.
The government had already given initial approval for the listing in 2017, but fresh approval was required following the capital infusion of Rs 1,500 crore early last year.
The capital infusion was made to enhance IREDA’s net worth and to help it fund additional RE financing. It was also intended to improve the capital-to-risk weighted assets ratio (CRAR) to facilitate its lending and borrowing operations.
The potential listing of the company will unlock value of its holding and at the same time provide opportunity to the investors to acquire a stake in the company.
The IPO will help IREDA secure capital for meeting growth plans without depending on the public exchequer. It will also improve governance through greater market discipline and transparency arising from listing requirements and disclosures.
IREDA is currently a wholly-owned government mini-ratna CPSE, engaged in financing of renewable energy and energy efficiency (EE) projects in India. It is registered as an NBFC with the RBI.
The company will likely play a key role in the government’s ambitious green energy targets of achieving 500 GW of installed RE capacity by 2030.
IREDA’s profit rose by 87% to Rs 201 crore for the December quarter, mainly on higher income. Its total income rose by 17% to Rs 869 crore from Rs 743 crore in the year-ago quarter.
In summary, the Indian Renewable Energy Development Agency is set to go public, and the IPO will help the company secure capital for its growth plans and improve governance. The move is in line with the government’s ambitious green energy targets and will provide an opportunity for investors to acquire a stake in the company.
About IREDA:
Established in 1987, IREDA is a Government of India Enterprise and is classified as a Mini Ratna company. The company is administratively controlled by the Ministry of New and Renewable Energy.
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