IREDA IPO booked 3 times on Day 2 so far; retailers & NIIs lead bidders

The initial public offering (IPO) of Indian Renewable Energy Development Agency (IREDA) continued to witness a strong buying intested from the investors during the second day of the bidding process. The issue, which had opened on Tuesday, November 21, was overall subscribed 1.96 times on day one.

IREDA is raising a total of Rs 2,150.21 crore via its initial stake sale in the fixed price band of Rs 30-32 per share in the lot size of Rs 460 equity shares and its multiples thereof. Of the block, the PSU miniratna by the Ministry of Renewable Energy is raising Rs 1,290.13 crore via fresh issue, while the Government of India is selling 2.69 crore equity shares via OFS.

According to the data, the investors made bids for 1,40,32,49,780 equity shares, or 2.99 times, compared to the 47,09,21,451 equity shares offered for the subscription by 12.40 pm on Wednesday, November 22. The bidding for the issue will conclude on Thursday, November 23.

The portion reserved for non-institutional investors (NIIs) was subscribed 4.80 times, while the allocation for retail investors was booked 3.13 times. The portion for employees saw a subscription of 3.61 times and the quota set aside for qualified institutional bidders (QIBs) was booked 1.36 times as of the same time.

Majority of the brokerage firms tracking the PSU issue are positive on it and have suggested to subscribe to it. They see trong balance sheet, backing of the Government, diversification and expansion in emerging green technologies, robust order books and solid asset quality as the key positive for the company in the long-run.

IREDA currently has deployed 60 per cent of their loan book financing towards solar, wind and hydro-power projects and with significant growth to come from Government announcements/targets such as Annual Green Hydrogen production of 5 MMT by 2030, increasing adoption of EV, manufacturing for Hydrogen electrolysis and Battery storage, said Dalal & Broacha Stock Broking.

"Growth prospects seem lucrative. At the cut-off price of Rs 32, IREDA comes at a reasonable valuation of 1.3 times fully diluted price-to-book and a post-issue market cap of Rs 8,600 crore. We recommend a 'subscribe' to the issue," it said. Another brokerage firm Hensex Securities has also suggested to bid for the issue listing gains as well as for long-term investments.

Ahead of its IPO, IREDA mopped up Rs 643.26 crore from 58 anchor investors as it allocated 20,10,19,726 shares at an issue price of Rs 32 per share. BoB Capital Markets, IDBI Capital Market Services and SBI Capital Markets are the lead managers to the issue, while Link Intime is the registrar.

IREDA operates in the niche segment of RE which is poised to grow at a rapid pace with the government's increased focus. Elevation of IREDA to the ‘Schedule A’ category opens the door for 'Navratna' status, which would strengthen the balance sheet. Lowest cost of funding and stringent corporate governance provides IREDA a competitive edge, said Motilal Oswal with a 'subscribe' tag.


Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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