IREDA’s IPO to be managed by IDBI, BOB, and SBI Capital

The Indian government has designated IDBI Capital, BOB Capital, and SBI Capital to oversee the Indian Renewable Energy Development Agency’s (IREDA) initial public offering (IPO). IDBI Capital is the transaction’s principal banker. Additionally, Saraf and Partners has been designated as the IPO’s legal counsel. The IPO is scheduled in 2024.

IREDA is a wholly owned Government of India corporation that was established in 1987 to finance renewable energy and energy efficiency projects in India. As of now, the company has financed over 3,068 renewable energy project loan accounts with a total loan sanction and disbursement of Rs 1.42 trillion and Rs 0.9 trillion, respectively. It has also supported the installation of 19,502 MW of renewable energy capacity in the country.

In March 2023, the Cabinet Committee on Economic Affairs (CCEA) chaired by the Indian prime minister Mr Narendra Modi approved the listing of IREDA on the stock exchanges through an IPO by part sale of the government’s stake in it and to raise funds for IREDA through issue of fresh equity shares.  The Department of Investment and Public Asset Management (DIPAM) will drive the listing process. This decision supersedes earlier CCEA’s decision taken in June, 2017 for allowing IREDA to issue 139 million fresh equity shares of Rs 10 each to the public on book building basis through IPO. The instant decision has been necessitated due to change in capital structure following infusion of capital to the tune of Rs 15 billion by the government in March, 2022.

Also, in the same month, the Reserve Bank of India granted status of an ‘Infrastructure Finance Company (IFC)’ to IREDA. It was earlier classified as ‘Investment and Credit Company (ICC)’. With an IFC status, IREDA will now be able to take higher exposure for renewable energy financing. The IFC status will also help the company to access a wider investor base for fund mobilisation, resulting in competitive rates for fundraising.