The initial public offer (IPO) of state-run Indian Renewable Energy Development Agency (IREDA) was subscribed a strong 38.75 times so far on the third and final day of the bidding process on Thursday. This was led by massive subscription from qualified institutional buyers at 104.57 times.

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The NII category was also not too behind with 24.13 times subscription. The retail category was the least booked at 7.64 times, while the portion reserved for employees saw a strong 9.59 times subscription.

According to the data, the investors made bids for 18,24,95,43,660 equity shares, compared to the 47.09 crore equity shares offered for the subscription by 4:40 pm today. The issue closes for subscription today.

IREDA is the seventh most subscribed public-sector undertaking (PSU) IPO of the last decade.

According to market sources, the company's shares are trading at a premium of ₹10 in the unlisted market. The company is offering its shares at ₹30-32 apiece.

Analysts advised investors to subscribe to the IREDA IPO, citing the company's consistent financial growth, low base, and improvement in asset quality.

"IREDA enjoys front runner tag in renewable energy financing and advisory services and is a PSU. The issue is priced at a P/BV (price-to-book value) of 1.11 based on its NAV of ₹28.80 as of September 30, 2023, and at a P/BV of 1.09 based on its post-IPO NAV of ₹29.28 per share (at the upper cap). Hence, investors may consider parking of funds for the medium to long-term rewards," said ‎Globe Capital.

The company is aiming to raise ₹2,150.21 crore through the share sale. At the upper end of the price band, the post issue implied market capitalisation of IREDA would range between ₹8,063 crore and ₹8,601 crore.

The IPO consists of a fresh issue of 40.32 crore shares aggregating to ₹1,290.13 crore and an offer for sale (OFS) of 26.88 crore shares worth ₹860.08 crore.

The net proceeds from the issue will be used to augment the capital base to meet future capital requirements and onward lending. IREDA expects to receive the benefits of listing the equity shares on the stock exchanges.

IDBI Capital Markets, BOB Capital Markets, and SBI Capital acted as the book-running lead managers to the issue, while Link Intime India was the registrar. The equity shares will be listed on both the exchanges.

Company profile

IREDA, a Mini Ratna (Category - I) government enterprise, is administratively controlled by the Ministry of New and Renewable Energy (MNRE).

The company finances projects across multiple Renewable Energy sectors such as solar power, wind power, hydro power, transmission, biomass including bagasse and industrial co-generation, waste-to-energy, ethanol, compressed biogas, hybrid RE and green-mobility. Its total loan book stands at ₹47,514 crore as on September 2023.

IREDA’s asset quality performance has improved over the last few years and has been in line with that of its larger power financing peers catering mainly to conventional energy financing.

First Published:Nov 23, 2023 4:56 PM IST