The Department of Investment and Public Asset Management (DIPAM) will drive the listing process. The government had given initial approval for the listing in 2017.
The fresh approval for the IPO comes after the government infused Rs 1,500 crore capital into the company early last year. The additional equity infusion was made to enhance its net worth and to help it fund additional RE financing. Further, the capital was supposed to improve the capital-to-risk weighted assets ratio (CRAR) to facilitate its lending and borrowing operations.
“The instant decision has been necessitated due to change in capital structure following infusion of capital,” the government said in a release.
The government hopes the potential listing of the company will unlock the value of its holding and at the same time provide an opportunity for the investors to acquire a stake in the company.
Further, the IPO will help IREDA secure capital for meeting growth plans without depending on the public checker. “The listing will improve governance through greater market discipline and transparency arising from listing requirements and disclosures,” the release noted.
IREDA is currently a wholly-owned government mini-ratna CPSE, engaged in financing of renewable energy and energy efficiency (EE) projects in India. It is registered as an NBFC with the RBI. The company will likely play a key role in the government’s ambitious green energy targets of achieving 500 GW of installed RE capacity by 2030.
IREDA had reported 87% in its profit at Rs 201 crore for the December quarter, mainly on higher income. The net profit stood at Rs 107 crore in the same quarter of last year.
Its total income rose by 17% to Rs 869 crore from Rs 743 crore in the year-ago quarter.
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