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NEW DELHI : State-owned Indian Renewable Energy Development Agency (IREDA) is planning a public listing and setting up an Alternate Investment Fund (AIF) to tap pension, insurance, and Environmental, Social and Governance (ESG) funds.

The initial public offer (IPO) by one of the largest lenders to the green energy space comes in the backdrop of India announcing a renewable energy target of 450 gigawatt (GW) by 2030 that will require large financing requirement.

IREDA shall also come out with the IPO of fresh equity shares and plans to make further issue of green bonds in the international & domestic market to garner capital for onward lending," the Ministry of New and Renewable Energy said in a statement after the 34th annual general meeting of IREDA on Tuesday.

The other large lenders to the Indian power sector Power Finance Corp. (PFC) and REC Ltd are already listed. 

IREDA's share sale plan also comes in the backdrop of state-owned NTPC Ltd starting the groundwork for the IPO of its units NTPC Vidyut Vyapar Nigam Ltd (NVVN) and NTPC Renewable Energy Ltd (NTPC REL), with merchant bankers making preliminary presentations as reported by Mint earlier. NVVN and NTPC REL are expected to be among the first clean energy firms to list on domestic bourses.

“IREDA is geared up towards five-fold growth in the loan book from Rs28,000 Crore (approx.) ending March 2021 to Rs1.35 lakh crore ending March 2026. The company plans to increase the revenue per employee from Rs. 17 Crore (approx.) in FY 2020-21 to Rs. 55 Crore ending FY 2025-26 (approx.)," Pradip Kumar Das, chairman and managing director, IREDA said in the statement.

“Shri Das also underlined that IREDA is presently a debt listed company and it is fully geared up for working in the direction of getting equity listed," the statement added.

IREDA’s push to grow its loan book five-fold over next five years comes at a time when the window for carbon projects globally is getting smaller with a shift towards meeting environment, sustainability and governance (ESG) compliance.

“CMD, IREDA further underlined that IREDA is in the process of setting up a debt fund in the form of an Alternate Investment Fund (AIF) to tap large Institutional Investors such as Pension funds, Insurance Funds, Environmental, Social and Governance Funds, etc. AIF will also help IREDA in financing new projects of those borrowers who are nearing the exposure limit. The company is also planning to do Asset-Based Securitisation (ABS) by issuance of Pass-Through Certificates," as per the statement.

IREDA has also called bids for setting up solar manufacturing units under the government’s production linked incentive (PLI) scheme for which Mukesh Ambani-controlled Reliance Industries Ltd (RIL), Adani Group and US- headquartered First Solar are among the 19 firms that have bid. The minimum capacity of the manufacturing unit to be installed is 1 GW with the PLI to be disbursed to successful applicants annually over a period of five years.

“Despite the pandemic regime, IREDA completed the FY 2020-21 on second highest loan disbursements (since inception) amounting to Rs. 8,827 Crore, highest ever Profit Before Tax of Rs. 569.52 Crore with an increase of 136.20% over the amount of Rs. 241.11 Crore in the previous year and a net reduction in NPA from 7.18% in the previous year to 5.61% ending FY2020-21, which is a significant reduction of approx. 22% from the previous year," Das said in the statement.

IREDA recently conducted Viability Gap Funding (VGF) based competitive bids for 5 GW solar project capacity for central public sector units.

This comes at a time when India’s push for green energy has borne results, with the country crossing the 100 GW milestone of installed renewable energy capacity. India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, including 100GW of solar power by 2022.

Speaking at the 76th session of the United Nations General Assembly, Prime Minister Modi said, “Today, India is moving very fast towards the target of 450 GW of renewable energy. We are also in the campaign to make India the world’s largest Green Hydrogen Hub."

The statement came in the run up to United Nations Climate Change Conference, also known as COP-26 that starts in Glasgow on 31 October.

India on its part has been working on a raft of measures including clean electricity, ethanol blending with fossil fuels, green mobility, battery storage and green hydrogen to help reduce pollution and facilitate commitments made at COP-21 in Paris.

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