Buoyed by the growing positive investor sentiment on India’s green energy transition, state-run Indian Renewable Energy Development Agency (IREDA) expects to raise more than the targeted ₹4,500-5,000 crore through a rights issue in FY25.
The non-banking financial company (NBFC) wants to offload up to 10 per cent stake in the company, but the final decision on this rests with the central government.
IREDA’s board has approved the proposal to raise ₹4,500 crore through a follow-on public offer (FPO), qualified institutional placement (QIP), rights issue, preferential issue, or any other permissible mode.
Speaking to businessline on the sidelines of the RE-INVEST 2024, IREDA Chairman and Managing Director Pradip Kumar Das said: “We will come to the market by the end of this year. We need fresh equity of about ₹4,500-5,000 crore. We expect to raise more than the amount.”
The RE-INVEST 2024 has been organised by the Ministry of New & Renewable Energy (MNRE) in participation with CII.
Asked about investor sentiment, he said that foreign investors are now looking at India due to its push to clean energy products and services.
“If the government allows us to fundraise, we have several options, including OFS, QIP, rights issue, as per SEBI guidelines. It is subject to final government approval, if required we can further improvise within the approved percentage of government of India, subject to our business requirement,” he explained.
Stake sale
Das said the Navratna company aims to offload up to 10 per cent stake.
“When we raise equity the stake of government will reduce. For that we have requested them to allow us to sell up to 10 per cent. It depends upon the government how much stake sale they allow. We hope to get the approval soon,” he added.
Apart from this, Das said adding, IREDA will raise money from the debt market.
“This year we plan to raise about ₹24,500 crore. It may increase by the end of this year. We also need to maintain the asset quality along with increasing our loan book. Our net NPA at 0.95 per cent. In our loan book 74-76 per cent is to private sector,” he said.
Clean energy commitments
IREDA also pledged its commitment to increase support for green energy transition.
“We have pledged to finance an additional ₹5 lakh crore on expanding renewables by 2030. So far we have tied up for projects worth nearly ₹2 lakh crore and financed a cumulative renewable energy capacity of 27 gigawatts (GW),” Das said.
Of this 27 GW, Das said adding, “Around 58 per cent is coming from wind, solar and hydro, 18 per cent is coming from emerging and new areas such as CNG, ethanol, charging infra, e-mobility. Twenty-four per cent is coming from state-owned utilities for their renewable energy projects.”
In the overall renewable energy lending space, about 35 per cent comes from NBFCs, 15 per cent comes from banks, another 50 per cent comes from others including bonds. Out of the overall lending made for renewable energy IREDA’s share is about 11.5-12 per cent, he noted.
GIFT city
IREDA is also eyeing a debut in the international market by financing projects abroad through its GIFT City subsidiary.
The power and infra sector lender will finance solar component manufacturing and green hydrogen businesses in India through the subsidiary, which would largely cater to the export demand.
“We have opened our GIFT City office and will operationalise it. We will borrow and lend from here and what it would do is there will be no requirement for foreign currency conversion. Indian developers setting up projects here would get loans through GIFT City. We will also lend to firms from India setting up projects abroad,” Das said.
IREDA incorporated its subsidiary at the International Financial Services Centre (IFSC) located in Gift City, Gujarat in May 2024 and is yet to make its first transaction.
Das said the subsidiary is in talks with several companies for financing and tie-ups would follow in days ahead.