IREDA Shares Gain Over 5% on Strong Q3 Guidance and ₹4,500-Crore QIP Plans

Indian Renewable Energy Development Agency (IREDA) shares surged over 5% on Monday, January 13, 2025, despite a broader market downturn, reflecting investor confidence in the company’s strong financial performance and growth potential in the clean energy sector. The stock rallied 5.51% to ₹212.30 on the BSE, outperforming the market which saw a 5.51% decline. This surge was buoyed by strong Q3FY25 results and progress on a ₹4,500-crore Qualified Institutional Placement (QIP).

Key Drivers Behind the Rally

1. Q3FY25 Results:

• Net profit grew by 27% year-on-year (YoY) to ₹425.38 crore compared to ₹335.5 crore in Q3FY24.
• Revenue from operations increased 35.6% YoY to ₹1,698.45 crore from ₹1,208.10 crore.
• Net interest income (NII) rose 39% YoY to ₹622.3 crore from ₹448.1 crore.
• Gross non-performing assets (NPAs) improved to 2.68%, down from 2.90% in Q3FY24.

2. QIP Announcement:

• IREDA is preparing for a ₹4,500-crore equity raise through a QIP approved by the Department of Investment and Public Asset Management (DIPAM) in September 2024.
• The fundraiser will support IREDA's efforts to scale renewable energy financing and accelerate India's clean energy transition.

Financial and Stock Performance

Despite a 330-basis-point decline in operating margins, the company demonstrated strong operational growth, with current margins at 30.42%. The PSU stock has delivered over 87% returns in the last year, even as it has fallen nearly 9% in the past three months and 27% over six months.

Strategic Importance of QIP

The ₹4,500-crore QIP is expected to strengthen IREDA's capital base, enabling the company to finance more renewable energy projects. This capital infusion will allow IREDA to undertake more significant, more ambitious projects, playing a pivotal role in advancing India's clean energy transition. As part of the initiative, the government plans to dilute up to 7% of its stake.

Industry Outlook and Future Plans

IREDA's strategic focus on financing clean energy projects positions it well for significant and sustained growth. The company has been instrumental in driving India's transition to a low-carbon economy, a trend that is expected to continue in the future.

At 11:20 AM on January 13, IREDA shares were trading at ₹206.70, up 2.73% on the BSE.