IREDA clarifies on NSE's query over Nepal hydropower project. Details here

Indian Renewable Energy Development Agency (IREDA) Ltd on Saturday issued its clarification in response to NSE's emailed query over the recent equity investment of 10 per cent shareholding in GMR Upper Karnali Hydro Power Ltd and Karnali Transmission Company Pvt Ltd to set up a 900 MW Hydroelectric Power Project in Nepal. The stock exchange sought clarity on the acquisition parameters.

The renewable energy PSU, in its reply, said, "IREDA Board of Directors in the 420th meeting dated 16.07.2024, after detailed deliberations and considering the national interest, have passed the resolution for an in-principle approval for up to 10 per cent equity investment in each of the companies/SPVs, namely, GMR Upper Karnali, Nepal and Karnali Transmission Company, Nepal (amounting to Rs 290 crore for both the SPVs), in association with SJVN, subject to approval from the government and other statutory/regulatory authorities."

The state-owned firm mentioned that the hydropower "project is under construction and hence, operating revenue/sales" of GMR Upper Karnali and Karnali Transmission are nil.

It also said the acquisition doesn't fall within related party transactions and promoter or promoter group or group companies have no interest in the entity which is being acquired.

IREDA also underscored that the acquisition "is within the main line of business of the listed entity" and the acquisition cost "has not been finalised."

On the stock-specific front, IREDA shares settled 5.71 per cent higher at Rs 272.10 on Friday, pausing their sharp two-day correction. The counter has given multibagger returns by rallying 160.01 per cent on a year-to-date (YTD) basis. With that being said, the IREDA's share price has seen a massive uptick from its initial public offering (IPO) price of Rs 32. It was listed on November 29 last year.

The state-run firm said its profit after tax (PAT) climbed 30 per cent to Rs 384 crore for the June 2024 quarter (Q1 FY25) compared with Rs 295 crore in the corresponding quarter of last year.

During the quarter under review, revenue from operations grew 32 per cent year-on-year (YoY) to Rs 1,510 crore from Rs 1,143 crore in the same quarter last year. IREDA said its outstanding loan book stood at Rs 63,207 crore in Q1 against Rs 47,207 crore in the year-ago quarter, up 34 per cent.

Brokerage PhillipCapital maintained its 'Sell' rating on the stock, saying that the recent rally on the counter was driven by passive flows rather than any major fundamental reason.

"We believe the best is already priced in to the stock. We maintain 'SELL' rating with revised target of Rs 130 (Rs 110 earlier)," it stated.

For near-term traders, Rajesh Palviya, Head Technical Research at Axis Securities, said the stock saw some profit booking but the trend is still on the bullish side. "One should deploy a trade around the Rs 250 range, keeping a stop loss placed at Rs 238. Until the stock holds this level, the trend may remain positive. Once it crosses Rs 265-270 levels, we can see a resumption of the rally and then possible upside targets will be Rs 310-320," Palviya told Business Today TV.

IREDA is a 'Navratna' PSU under the administrative controls of the Ministry of New and Renewable Energy. As of June 2024, the government held a 75 per cent stake in it.

The organisation offers financial products (fund- and non-fund-based) associated services, from project inception to post-completion, for renewable energy projects and related activities like equipment manufacturing and transmission.