Bumper Debut | IREDA stock lists at over 56% premium to IPO price

Ahead of the listing, the stock was trading at a 37 percent premium to the issue price in the grey market

The India Renewable Energy Development Agency (IREDA) made an impressive market debut on November 29, listing at a 56.25 percent premium to the issue price of Rs 32. The stock opened at Rs 50 on both NSE and BSE.

Ahead of the listing, the stock was trading at a 37 percent premium to the issue price in the grey market, an unofficial ecosystem where shares start trading much before the allotment and continue till the listing day. Most investors track the grey market premium to get an idea of the listing price.

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The state-run company raised Rs 2,150.21 crore through the initial public offering that consisted of a fresh issue of 40.31 crore shares worth Rs 1,290.13 crore and an offer-for-sale (OFS) of 26.87 crore shares worth Rs 860.08 crore.

The offer was subscribed 38.8 times with investors across categories buying a total of 1,827.25 crore equity shares, valued at Rs 58,472.07 crore at the upper price band), against the issue size of 47.09 crore.

Also Read: IREDA to debut on November 29. Will it beat grey market premium?

The price band for the issue, which opened on November 21 and closed on November 23, was fixed at Rs 30-32 a share. IDBI Capital Market Services, BoB Capital Markets and SBI Capital Markets were the lead managers to the issue, while Link Intime India was the registrar.

IREDA recorded a 58 percent CAGR growth in net profit during FY21-23. The capital-to-risk weighted asset ratio (CRAR) was 21.22 percent as of March 31, 2022, 18.82 percent as of March 31, 2023, and 20.92 percent as of September 30, 2023.

Total revenue rose 21.7 percent to Rs 3,481.9 crore in FY23 from Rs 2,859.9 crore in FY22. Profit after tax grew 36.4 percent to Rs 864.62 crore from Rs 633.52 crore. Profit came in at Rs 294.6 crore in Q1FY24.

Also Read: IREDA IPO: Issue subscribed 38.8 times, retail portion booked 7.73 times on final day

IREDA is a wholly owned government of India enterprise under the administrative control of the ministry of new and renewable energy. It provides financial products and related services, from project conceptualisation to post-commissioning, for renewable energy projects and other value chain activities such as equipment manufacturing and transmission. IREDA is a Mini Ratna (Category - I) government enterprise.