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14 January 2024

IREDA IPO: Paving the Way for Renewable Energy Growth

Empowering the Future with Sustainable Financing:

*IREDA IPO*, a book-built issue of Rs 2,150.21 crores, emerged as a pivotal force in the renewable energy sector. This multifaceted offering comprised a fresh issue of 40.32 crore shares, amounting to Rs 1,290.13 crores, and an offer for sale of 26.88 crore shares, aggregating to Rs 860.08 crores.

Strategic Bidding and Allotment:

The IPO bidding, spanning from November 21, 2023, to November 23, 2023, reached its zenith with the allotment finalized on Friday, November 24, 2023. The stock found its home on the BSE and NSE on November 29, 2023.

Valuation Insights:

With a price band of ₹30 to ₹32 per share, the IPO beckoned investors with a minimum lot size of 460 shares, requiring an investment of ₹14,720. For seasoned and non-seasoned individual investors (sNII and bNII), the minimum lot size investment stood at 6,440 shares (₹206,080) and 31,280 shares (₹1,000,960), respectively.

Market Performance Highlights:

The stock exhibited vigor in the market, opening at ₹111.60 and reaching a high of ₹121.80, with a closing figure of ₹110.75. The 52-week performance showcased resilience, with a high of ₹123.20 (Dec 14, 2023) and a low of ₹50.00 (Nov 29, 2023). The total traded value on January 15, 2024, amounted to a substantial 16,54,94,007.

IPO Essentials:

- IPO Duration: November 21, 2023, to November 23, 2023
- Listing Date: November 29, 2023
- Face Value: ₹10 per share
- Price Band: ₹30 to ₹32 per share
- Lot Size: 460 Shares
- Total Issue Size: 671,941,177 shares, aggregating up to ₹2,150.21 Cr
- Fresh Issue: 403,164,706 shares, aggregating up to ₹1,290.13 Cr
- Offer for Sale: 268,776,471 shares of ₹10, aggregating up to ₹860.08 Cr
- Issue Type: Book Built Issue IPO
- Listing At: BSE, NSE

Ownership Landscape:

The pre-issue and post-issue shareholding portrays a transition from 2,284,600,000 shares to 2,687,764,706 shares.

Reservation Dynamics:

The IPO catered to various investor categories:

- QIB: 19.94%
- NII: 14.96%
- bNII (> ₹10L): 9.97%
- sNII (< ₹10L): 4.99%
- Retail: 34.90%
- Employee: 0.28%

Investor Allocation Details:

The meticulous allocation included 201,019,726 shares for anchor investors, 134,013,152 shares for QIBs, 100,509,864 shares for NIIs, and 234,523,015 shares for retail investors. The offering extended to employees, with 1,875,420 shares.

Anchor Investor Triumph:

IREDA IPO made a resounding start by raising Rs 643.26 crore from anchor investors on November 20, 2023.

IPO Timeline Highlights:

- IPO Open Date: Tuesday, November 21, 2023
- IPO Close Date: Thursday, November 23, 2023
- Basis of Allotment: Friday, November 24, 2023
- Initiation of Refunds: Saturday, November 25, 2023
- Credit of Shares to Demat: Tuesday, November 28, 2023
- Listing Date: Wednesday, November 29, 2023
- Cut-off time for UPI mandate confirmation: 5 PM on November 23, 2023

Lot Size Dynamics:

Investors had the flexibility to bid for a minimum of 460 shares and in multiples thereof:

Application	Lots	Shares	Amount
Retail (Min)	1	460	₹14,720
Retail (Max)	13	5,980	₹191,360
S-HNI (Min)	14	6,440	₹206,080
S-HNI (Max)	67	30,820	₹986,240
B-HNI (Min)	68	31,280	₹1,000,960

About Indian Renewable Energy Development Agency Ltd:

Incorporated in March 1987, *IREDA* is a public limited government company and a veteran in renewable energy financing and advisory services. With over 36 years of active involvement, IREDA has been a key player in fostering new and renewable energy projects, along with energy efficiency and conservation projects.

Financial Performance Snapshot:

As of September 30, 2023:

- Assets: ₹51,208.36 Crore
- Revenue: ₹2,320.46 Crore
- Profit After Tax: ₹579.32 Crore
- Net Worth: ₹6,580.61 Crore

Key Financial Indicators:

- ROE: 15.44%
- Debt/Equity: 6.77
- RoNW: 15.44%
- EPS (Rs): 3.78
- P/E (x): 7.42

Objects of the Issue:

The proceeds are earmarked for augmenting the capital base to meet future capital requirements and onward lending. Additionally, the company anticipates benefits from listing, enhancing brand image, and creating a public market for the Equity Shares in India.

Expert Analysis:

Despite being fully priced based on annualized FY24 earnings, it is considered a long-term investment for well-informed investors.

IPO Subscription Status:

As of November 23, 2023, the IREDA IPO garnered significant attention with a subscription of 38.80 times. The QIB category subscribed 104.57 times, NII category subscribed 24.16 times, and the retail category subscribed 7.73 times.

Note: All financial figures are in INR (Indian Rupees), and market-related data is as of November 23, 2023.

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