IREDA launches Rs 5,000 crore QIP, but who really owns the stock?

State-run Indian Renewable Energy Development Agency (IREDA) has launched its much-anticipated Qualified Institutional Placement (QIP) to raise up to Rs 5,000 crore, as the renewable energy financier looks to fund its next phase of growth. The floor price has been set at Rs 172.4 per share, just 2.3% below Thursday’s close of Rs 176.50.

Shares of IREDA slipped 1.5% on Friday to Rs 173.90 on the BSE.

Since its listing in December 2023 at Rs 32 per share, IREDA’s stock has delivered a wild ride for investors. It surged nearly 10x to a high of Rs 310 before crashing below Rs 100, and has since staged a partial comeback, rising 3% in the past month, but still down about 44% from its peak.

Through the highs and lows, one investor group has only grown stronger: retail shareholders. In December 2023, just weeks after listing, IREDA had 13.5 lakh retail shareholders, those holding up to Rs 2 lakh in share capital, with a combined stake of 15.25%.

That figure has now nearly doubled. As of June 6, retail shareholders number 26.48 lakh and control 20.25% of the company.

Meanwhile, domestic mutual funds have kept their distance, holding a negligible 0.23% as of the March quarter. Foreign Portfolio Investors (FPIs) held 1.75%.

The government remains the dominant shareholder, owning 75% of IREDA.

Merchant bankers managing the issue include IDBI Capital Market Services, BNP Paribas, SBI Capital Markets, Emkay Global Financial Services, and Motilal Oswal Investment Advisors.

The government’s equity dilution through this QIP will not exceed 7%, as per the proposal approved earlier in January.

Growth capital in focus

IREDA’s management has consistently emphasised the need for fresh capital to keep pace with the company’s expanding loan portfolio. “The company is growing at a strong pace,” officials have said, adding that “we had requested the government to take the QIP route to raise funds.”

The QIP is expected to help the company strengthen its balance sheet and scale up lending in the renewable energy sector.

IREDA Q4 earnings

In the March quarter, IREDA reported a 49% year-on-year rise in consolidated net profit to Rs 502 crore, compared to Rs 337 crore a year ago.

Revenue from operations rose 37% YoY to Rs 1,905 crore, up from Rs 1,391 crore in Q4FY24. On a sequential basis, profit after tax grew 18% from Rs 425 crore in Q3FY25.

Operating profit for Q4FY25 stood at Rs 770 crore, up 55% from Rs 498 crore in the same quarter last year.

Gross NPAs for the March quarter stood at Rs 1,866 crore, compared to Rs 1,845 crore in Q3FY25 and Rs 1,411 crore in Q4FY24.

Also read | IREDA shares slip 2% as firm launches QIP to raise up to Rs 5,000 crore

Mixed technical picture

Technically, the stock is showing a neutral-to-positive setup. It is trading below four of its eight key simple moving averages — including the 5-day, 10-day, 150-day, and 200-day SMAs. The Relative Strength Index (RSI) is at 58.2, while the MACD stands at 2.4, remaining above both the centre and signal lines.

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