Shares of this PSU company jumped around 3 percent in Wednesday’s trading session after signing a Memorandum of Understanding (MoU) with Indian Overseas Bank. The company was recently listed at Rs. 50 per share i.e., 56.25 percent higher than the issue price of Rs. 32.
With a market capitalisation of Rs. 32,925 crores, the shares of Indian Renewable Energy Development Agency Ltd (IREDA) started Wednesday’s trading session on a lower note at Rs. 118.55 compared to its previous close of Rs. 119.50. During the trading session, the shares hit a high of Rs. 125.80, gaining around 125.60 and are currently trading at Rs. 123.75 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced they had joined hands with the Indian Overseas Bank (IOB) through the signing of a Memorandum of Understanding (MoU) for co-lending and loan syndication for a diverse spectrum of Renewable Energy projects across the nation.
Commenting on this Shri Pradip Kumar Das, CMD, IREDA said, “This strategic partnership between IREDA and Indian Overseas Bank marks a significant step in our commitment to accelerate the growth of renewable energy in the country”.
He also stated, that through the MoU and prior agreements with other leading financial institutions, IREDA is well-positioned to fund large renewable energy projects, aligning with the Hon’ble Prime Minister’s COP26 announcement to achieve a 500 GW Non-Fossil-based electricity generation capacity by 2030.
The signed MoU includes provisions for co-lending and co-origination support for all Renewable Energy projects. The partnership with Indian Overseas Bank aims to streamline loan syndication and underwriting processes, management of Trust and Retention Account (TRA) for IREDA borrowers, and work towards fixed interest rates over a 3 to 4-year period for IREDA borrowings.
Earlier, IREDA had partnered with other prominent financial institutions, including Bank of Baroda, Bank of India, Union Bank of India, India Infrastructure Finance Company Limited and Bank of Maharashtra. As these MoUs similarly focus on co-lending and loan syndication for a wide range of Renewable Energy projects across the country.
Coming onto the company’s financial statement, the revenue increased by 22 percent from Rs. 2,860 crores during FY21-22 to Rs. 3,483 crores in FY22-23. In addition, the net profits zoomed by 35 percent from Rs. 634 crores to Rs. 864 crores during the same timeframe.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 15.33 percent during FY 21-22 to 15.44 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 8.09 percent to 8.17 percent during the same timeframe. Furthermore, the net profit margin increased from 22.04 percent during FY21-22 to 24.82 percent during FY22-23.
Headquartered in New Delhi, Indian Renewable Energy Development Agency was incorporated in 1987. It is a Mini Ratna government enterprise in the business of promoting, developing, and extending financial assistance for new and renewable energy (RE) projects, and energy efficiency and conservation (EEC) projects.
Written By Vaibhav Patil
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