IREDA IPO: GMP jumps on strong subscription status. Should you apply?

IREDA IPO: The initial public offering (IPO) of Indian Renewable Energy Development Agency Ltd opened for subscription on Tuesday. Three day subscription of the public issue will end on 23rd November 2023, which means investors have just one day in hand to apply for this public offer. As per the IREDA IPO subscription status, the public issue has been subscribed 4.56 times after two days of bidding.

Meanwhile, shares of the state-owned company are gaining momemtum in unlisted stock market. According to market observers, shares of IREDA Ltd are available at a premium of ₹10 in grey market today, which is ₹3 higher from its yesterday's GMP of ₹7.

IREDA IPO GMP today

As per the market observers, IREDA IPO grey market premium (GMP) today is ₹10, which is ₹3 higher from its previous days GMP of ₹7. They said that grey market has gone bullish on IREDA shares despite mixed trends on Dalal Street and global market. Observers said that Indian PSU company has received strong response from investors in first two days of bidding and that has led to rise in sentiments in grey market. However, they went on to add that attradctive valuations is one of the major reasons that is attracting attention of grey market players towards IREDA shares.

Also Read: Why Tata Technologies IPO applicants should apply for IREDA IPO too — explained with GMP, other details

But, stock market experts advised investors to avoid taking GMP so seriously. They said that GMP is completely speculative as it is non regulated. They said that it has no connect with balance sheet of the company. Hence, one should stick to the basics and scan financials of the company as it gives concrete picture of company's fundamentals.

IREDA IPO subscription status

By 1:39 PM on day 3 of bidding, the public issue has been subscribed 14.61 times whereas its retail segment got subscribed 6.33 times. the NII portion of the public issue has been subscribed 16.84 times while its QIB segment has been subscribed 27.52 times.

In first two days of subscription, IREDA IPO got subscribed 4.56 times whereas its retail portion got subscribed 4.26 times, NIi portion got subscribed 7.74 times and QIB portion got subscribed 2.69 times.

The issue received bids of 2,14,70,52,300 shares against the offered 47,09,21,451 equity shares, at a price band of ₹30-32, according to the data available on the stock exchanges.

Non-Institutional Investors Portion was subscribed 7.74 times, Retail Portion subscribed 4.26 times, whereas Qualified Institutional Buyer Portion was subscribed 2.69 times. Employee Portion was subscribed 4.99 times. The issue kicked off for subscription on Tuesday, November 21, 2023 and will close on Thursday, November 23, 2023.

IREDA IPO: Should you apply?

Speaking on IREDA IPO review, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "The public issue is small in size and it has been offered at attractve valuations. Fundamentals of the company is also strong. So, one should subscribe for listing gain and if someone has long view, one can hold the stock for long term as well."

Giving 'subscribe' tag to the public offer, Rajan Shinde, Research Analyst at Mehta Equities said, "IREDA Ltd has shown a substantial growth in AUM of IREDA 41% YoY at end Sept 2023, and strong growth of 22%/39% with Net profit growth of 83%/36% in Fiscal 2022 and 2023. On valuation parse at upper price band of Rs.32/-, the issue is asking for a Market Cap of Rs.8601 cr. Based on annualized FY24 earnings and fully diluted post- IPO paid-up capital, the company is asking for a P/B multiple of 1.02x which seems to be fully priced compared to its peers. Being the government has set a substantial target for RE installation by 2030 to meet the net zero emission target and a front runner in renewable energy financing, we recommend investors to “SUBSCRIBE FOR LISTING GAIN” the IREDA IPO as well as Long term considering GOI initiatives to promote Renewable Energy sector."

IREDA IPO details

IREDA IPO allotment date is most likely on 24th November 2023 whereas IREDA IPO listing date is most likely on 29th November 2023 i.e. Wednesday next week.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.