MUMBAI : The initial public offering (IPO) of state-owned Indian Renewable Energy Development Agency Ltd (Ireda) opened on Tuesday and attracted investors across categories, reflecting rising prospects for renewable energy financing in the Indian market.
Overall, the IPO was oversubscribed 1.96 times, with bids received for 921 million shares against the 471 million shares on offer.
The response indicates that investors are confident about Ireda’s prospects as India’s largest green non-banking finance company (NBFC).
The institutional quota was subscribed 1.34 times, with offers for 179.9 million shares against 134 million shares available. Demand from non-institutional investors, including high-net-worth individuals and corporate bodies, was even higher at 2.73 times with 274.2 million shares on offer against 100.5 million reserved. The retail quota was subscribed 1.97 times and 462.6 million shares were tendered against the 234.5 million on offer.
The IPO will close on 23 November. The allotment for the IPO is expected to be finalized on November 29, and the shares are expected to be listed on the BSE and the National Stock Exchange on December 4.
The minimum lot size for application is 460 shares.
The IS ₹2,150 crore IPO comprises a fresh issue of up to 403.16 million 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.
IPO Ireda, with a price band of ₹30-32, traded by a ₹6 premium per share in the gray market on Tuesday.
The gray market is the unofficial market where shares of an upcoming IPO are traded between investors before they are officially listed.
The gray market price, also known as the gray market premium (GMP), is the price that investors are willing to pay for shares in the IPO before the final listing price is given.
Ireda IPO has reserved 50% of the shares in the public issue for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Investors.
Ireda’s diversified investment portfolio is worthwhile ₹47,206.66 crore, comprising 23 states and 5 UTs, it stands as a key player in India’s renewable energy sector. The company’s fund-based products include long-term, medium-term and short-term loans, top-up loans, bridge loans, takeover financing, loans secured against future cash flows, and lines of credit to NBFCs.
The company’s IPO is the first by a public sector enterprise following the May 2022 issue of Life Insurance Corporation. It is expected to raise much-needed capital for Ireda to expand its operations and play a central role in have a role in India’s transition to renewable energy.
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Updated: 21 November 2023, 09:59 PM IST
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