IREDA IPO: Anchor investors infuse Rs 643 crore ahead of debut

In a significant prelude to its highly-anticipated Initial Public Offering (IPO), the Indian Renewable Energy Development Agency (IREDA) — a pioneering force in green financing — has already garnered an impressive Rs 643.26 crore from anchor investors. This early enthusiasm sets the stage for a groundbreaking IPO, marking a historic moment as the first government-owned entity to go public since LIC’s venture in May last year.

As the IREDA IPO, valued at Rs 2,150 crore, opens for subscription until November 23, all eyes are on the debut of IREDA shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on December 4

Anchor Investor Frenzy

IREDA, a power sector-focused financing company, strategically allotted a whopping 20,10,19,726 equity shares to a diverse pool of 58 anchor investors, each priced at Rs 32. Among the notable participants were 13 prominent mutual funds, including heavyweights such as LIC MF Large & Mid Cap Fund, DSP Equity Opportunities Fund, SBI Banking & Financial Services Fund, HDFC MF, and ICICI Prudential, contributing through a total of 32 schemes.

IPO Dynamics and Pricing Insights

The IPO blueprint for IREDA, recognised as the largest pure-play green financing Non-Banking Financial Company (NBFC) in India, comprises a fresh issue of 40.31 crore shares and an Offer for Sale (OFS) of 26.87 crore shares by existing shareholders. The price band is set at Rs 30-32 per share, with a lot size of 460 shares and its multiples. For retail investors, this translates to a minimum application amount of Rs 14,720 for 460 equity shares and Rs 1,91,360 for a maximum of 5,980 shares.

As anticipation builds, the grey market premium (GMP) for IREDA is commanding Rs 6, signalling a potential listing at around Rs 38 (IPO price of Rs 32 + today’s GMP), reflecting an 18.75% surge over the issue price.

Green Mandate

As the largest green financing NBFC in the country, IREDA’s IPO assumes significance beyond the financial realm. It underscores a collective commitment to fostering sustainable practices in the power sector. The company earmarks the net proceeds from the fresh issue for augmenting its capital base to meet future capital requirements and to further fuel its lending initiatives.

Powering the future

Power sector financing NBFCs, like IREDA, play a pivotal role in supporting power generation, transmission, distribution, and various other activities. From funding thermal power plants to facilitating the growth of renewable energy projects such as solar power plants, wind farms, hydroelectric projects, bioenergy projects, and clean energy generation, IREDA’s mission aligns with India’s drive towards a sustainable and greener future.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.