State-owned Indian Renewable Energy Development Agency (IREDA, a Systemically Important Non-Deposit-taking Non-Banking Finance Company (a "NBFCND-SI"), with Infrastructure Finance Company ("IFC") status has filed its Draft Red Herring prospectus (DRHP) with capital market regulator Sebi to raise funds through for its initial public offering (IPO).
It is the first IPO by a public sector enterprise after Life Insurance Corporation's public issue in May last year.
The IPO with a face value of Rs 10 consists of fresh issue of up to 403.16 million equity shares and an offer for sale (OFS) of up to 268.78 million equity shares by the President of India, acting through the Ministry of New and Renewable Energy, Government of India ("Promoter Selling Shareholders"). The offer includes a reservation of up to for subscription by eligible employees.
The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Offer shall be available for allocation to Retail Individual Bidders.
As mentioned, the DRHP the proceeds from the Fresh Issue will be used for augmenting its capital base to meet its future capital requirements and onward lending.
IREDA has an impressive track record spanning over 36 years in the field of fostering, advancing, and providing financial support for fresh and sustainable energy (RE) projects, as well as energy efficiency and conservation (EEC) initiatives.
IREDA stands as India's largest dedicated green financing non-banking financial company (NBFC). It made history by being the pioneer issuer of the inaugural debt security known as the "green masala bond" in India, which is listed on the IFSC (International Financial Services Centre) exchange. Furthermore, IREDA achieved another remarkable milestone by becoming the first financial institution in India to raise funds through green masala bonds. In addition to these accomplishments, IREDA also holds the distinction of being one of the first financial institutions in India to secure global funding for climate-related initiatives from Development Financial Institutions (DFIs) and multilateral organizations.
The organization offers a comprehensive array of financial products (fund and non fund based) and associated services, from project inception to post-completion, for RE projects and related activities like equipment manufacturing and transmission.
As of June 30, 2023, its portfolio of outstanding term loans stood at ?47,206.66 crore, reflecting its diverse investment ventures. It has a geographically diversified portfolio, with Term Loans Outstanding across 23 States and five Union Territories across India, as of June 30, 2023 and has four strategically located branches in Mumbai, Hyderabad, Chennai and Bhubaneshwar to maximize geographical range in terms of territory.
Its Fund-based products cater to RE developers and encompass long-term, medium-term, and short-term loans for projects, manufacturing, and equipment financing, top-up loans, bridge loans, takeover financing, and loans secured against future cashflows.
IREDA also extends lines of credit to other non-banking financial companies (NBFCs) for lending to RE and EEC projects. Additionally, it offers loans to government entities and financing schemes for RE suppliers, manufacturers, contractors, while non-fund-based products comprise instruments like letters of comfort, letters of undertaking, payment on order instruments, and guarantee assistance schemes. Furthermore, it provides consultancy services on techno-commercial issues related to the RE sector.
During FY 2023 and the first three months ending June 30, 2023, IREDA sanctioned total loans amounting to ?32,586.61 crore and ?1,892.45 crore, respectively. Notably, its debt instruments have been rated India Ratings (AAA Stable), ICRA (AAA Stable), and Acuite (AAA Stable).
For the fiscal year 2023, the standalone revenue from operations increased 21.75% to Rs 3,481.97 crore against Rs 2,859.90 crore a year ago, primarily due to the growth of its Term Loans Outstanding in Fiscal 2023. Net profit increased by 36.48% from Rs 633.53 crore in fiscal 2022 to Rs 864.63 crore in fiscal 2023. Capital to risk weighted asset ratio ("CRAR") stood at 18.82% for Fiscal 2023 and for the three months ended June 30, 2023 it was 19.95%.
For the three months ended June 30, 2023, revenue from operations stood at Rs 1,143.21 crore and profit after tax was Rs 294.58 crore.
IDBI Capital Markets & Securities Limited, BOB Capital Markets Limited, and SBI Capital Markets Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.