IREDA surges 13% on heavy volumes; zooms 32% in 1 week post FY24 biz update

Further, both the BSE and NSE revised the circuit filter for the stock from 5% to 20% with effect from today.

Shares of Indian Renewable Energy Development Agency (IREDA) surged 13 per cent to Rs 178.80 on the BSE in Friday’s intra-day trade amid heavy volumes. The exchanges, with effect from today, have revised the circuit filter of the stock to 20 per cent from 5 per cent earlier.

In the past one week, the stock of state-owned financial institutions has zoomed 32 per cent after the company posted record loan growth for the recently concluded financial year of 2023-24 (FY24).

The stock recovered 42 per cent from its low of Rs 125.80 touched on March 20, 2024. It had hit a record high of Rs 215 on February 6, 2024. At 01:06 pm; IREDA was quoting 11 per cent higher at Rs 176.40, as compared to 0.12 per cent decline in the S&P BSE Sensex. The average trading volumes at the counter jumped nearly four-fold. As many as a combined 115.54 million equity shares have changed hands on the NSE and BSE.

In an exchange filing, released on April 1, IREDA said it recorded the highest-ever loan sanctions worth Rs 37,354 crore in FY24, while loan disbursements stood at Rs 25,089 crore. With this, total loan book stands at Rs 59,650 crore, a record growth of 26.71 per cent.

Further, its sanctioned loans jumped nearly 102 per cent year-on-year (Y-o-Y) to Rs 23,796 crore during the March quarter of FY24 (Q4FY24), while disbursed loans grew 14 per cent to Rs 12,869 crore.

Meanwhile, on March 28, 2024, the company’s board has approved the Borrowing programme up to Rs 24,200 crore for the financial year 024-25 (FY25).

The sectors financed by IREDA can broadly be classified as under wind energy, small hydro energy, bioenergy, solar energy, energy efficiency and conservation, and new and emerging technologies. RBI classified the company as “Infrastructure Finance Company”. The shares of the company got listed on November 29, 2023.

The favorable macroeconomic scenario, along with government initiatives like the recently launched PM Suryoday Yojana 2024, is anticipated to be advantageous for the company, according to analysts.

IREDA, involved in financing renewable energy and ancillary industries such as solar batteries and semiconductors, stands to benefit from such schemes. Additionally, IREDA plays a crucial role in implementing and bolstering various government power infrastructure-related initiatives. With a 31 per cent market share (as per its DRHP) in renewable energy sector financing, IREDA is well positioned to benefit from the favorable industry dynamics.

Given its substantial government ownership, IREDA receives strong support from the GoI in various forms. This support includes capital infusion, and the ability to raise funds at favorable rates through different channels. Additionally, IREDA can access funds from international bodies such as the World Bank, Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), Agence Française de Développement (AFD), European Investment Bank (EIB), among others, Brickwork Ratings said in recent rating upgrade rationale.