The Indian Renewable Energy Development Agency (IREDA) will come out with an initial public offer (IPO) consisting of a stake dilution by the government, as well as fresh equity issuance by the renewable energy project financier, to raise capital for business expansion.
“The IPO will help in unlocking the value of the government’s investment on one hand and on the other hand, will provide an opportunity to the public to acquire a stake in the national asset and draw benefits therefrom,” the government said in a statement.
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The Cabinet Committee on Economic Affairs approved the IREDA IPO on Friday. The Department of Investment and Public Asset Management (DIPAM) will drive the listing process. This decision supersedes the earlier CCEA decision taken in June 2017 for allowing IREDA to issue 139 million fresh equity shares of Rs 10 each to the public on a book-building basis through an IPO. The instant decision has been necessitated due to a change in capital structure following an infusion of capital to the tune of Rs 1,500 crore by the government in March 2022, it said.
“It will help IREDA in raising a part of its capital requirement for meeting growth plans without depending on the public exchequer, and improve governance through greater market discipline and transparency arising from listing requirements and disclosures,” the government said. IREDA is currently a wholly-owned government enterprise incorporated in 1987, engaged in the financing of renewable energy (RE) and energy-efficiency (EE) projects in India. The firm as of date has financed more than 3,068 RE projects loan accounts with cumulative loan sanction and disbursement to the tune of Rs 1.42 trillion and Rs 0.9 trillion, respectively, and has supported RE capacity addition of 19,502 MW in the country.
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It is registered as a non-banking financial company (NBFC) with the Reserve Bank of India. The government, in line with the pledge made as a part of the Nationally Determined Contribution (NDC) in the Paris Accord on Climate Change, has set the targets of achieving 175 GW of installed RE capacity by 2022 and 500 GW by 2030. IREDA has a pivotal role to play in the achievement of RE targets.
The implementation and operation of renewal energy/energy-efficiency projects by IREDA as per their business plan in line with the RE targets of the Centre will help in creating direct and indirect employment opportunities for both skilled and unskilled manpower.