State-run green financing company IREDA’s stock experienced a 40% premium as it debuted on the stock market. As of 10:18 am, the stock was trading at ₹53 per share, which is 68% higher than its issue price of ₹32. This performance exceeded the 31% gain that the grey market was expecting. The company’s market cap is currently at ₹11,920 crore as per the Bombay Stock Exchange.
IREDA’s initial public offering (IPO) raised ₹2,150 crore and was subscribed 38.8 times the shares on offer, with a strong interest from institutional investors. The qualified institutional buyer (QIB) portion was subscribed 104 times.
Prashanth Tapse, senior VP of research at Mehta Equities, expects IREDA to make history with its upcoming IPO. He advises short-term investors to consider booking profits above the expected gain of 25%, while encouraging long-term investors to hold for future potential.
The last few market debuts have seen mixed results, with some companies experiencing muted debuts and others seeing sharp listing gains.
IREDA is positioned as India’s largest green financing NBFC with over 36 years of experience in promoting, developing, and extending financial assistance for new and renewable energy projects. Tapse believes IREDA has the potential to upgrade to a Navratna company.
The company intends to use the net proceeds from the IPO to augment its capital base, meet future capital requirements, and continue lending. Its revenue from operations grew 24% and its net profit grew 36% in FY23. The company’s capital to risk-weighted asset ratio stood at 18.8% for FY23, and its gross non-performing assets (NPA) stood at 3.21% the end of FY23.
Source:
‘IREDA makes strong debut; shares gain 40% from IPO price’, Bombay Stock Exchange, November 30, 2023, https://www.businessinsider.in/stock-market/news/miniratna-ireda-stock-zooms-on-debut-with-40-listing-gains/articleshow/105579542.cms