shares of the Indian Renewable Energy Development Agency (IREDA) surged by 3% following the announcement of its impressive fiscal second-quarter earnings. The company’s net profit rose by 36% year-on-year, reaching ₹387.75 crore. This growth was primarily driven by increased revenues and robust loan growth, showcasing IREDA’s pivotal role in India’s renewable energy sector.
Main Points
Strong Financial Performance
IREDA’s total income from operations saw a remarkable increase of 38% year-on-year, totaling ₹1,630.38 crore during the July-September quarter. The net interest income (NII) also experienced significant growth, rising 52% to ₹546.8 crore compared to the same period last year. This performance highlights IREDA’s commitment to financing and supporting renewable energy projects across India.
According to CMD Pradip Kumar Das, “The substantial growth in loan sanctions and disbursements underscores the company’s commitment to supporting green projects across the nation.” This aligns with the government’s broader goals of enhancing renewable energy infrastructure in India.
The market responded positively to IREDA’s earnings report, with shares trading at approximately ₹236.43 on the National Stock Exchange (NSE). This marks a 125% increase in share price since the beginning of the year, significantly outperforming the Nifty index, which has only risen by 14% during the same period. This surge reflects investor confidence in IREDA’s strategic direction and operational efficiency.
Investment in Renewable Projects
In addition to its strong financial results, IREDA has been actively involved in expanding its project portfolio. Recently, it entered into a partnership with SJVN and GMR Energy to develop a 900 MW hydroelectric project in Nepal. This initiative not only aims to enhance regional energy security but also leverages Nepal’s vast hydropower potential.
The company has committed a total investment of ₹290 crore for this project, acquiring a 10% stake each in both the Karnali project and its transmission company. This move is expected to further strengthen IREDA’s position as a leader in renewable energy financing.
Retail Investor Interest
The recent quarter also saw an increase in retail investor participation. Data from BSE indicates that retail investors raised their stake in IREDA from 18.59% at the end of June to 19.88% by September’s end. The number of retail investors surged from 22.15 lakh to 25.86 lakh, indicating growing public interest in IREDA as a viable investment option.
Looking ahead, IREDA is set to establish a wholly-owned subsidiary focused on retail business segments such as rooftop solar and electric vehicles. This initiative is expected to diversify its offerings and tap into emerging markets within the renewable energy sector.
Moreover, analysts predict that IREDA will continue to perform well due to its solid financial foundation and strategic partnerships. The company has also announced plans for a ₹4,500 crore fundraising initiative, which may see the government dilute up to 7% of its equity stake.
