The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the listing of IREDA, a central public sector undertaking (CPSE) under the Ministry of New and Renewable Energy (MNRE). It finances renewable energy and energy efficiency projects.
Senior officials told Moneycontrol that IREDA will hit the capital markets in the upcoming financial year (2023-24).
This will help raise funds for the Indian Renewable Energy Development Agency (IREDA) through issue of fresh equity shares. Department of Investment and Public Asset Management (DIPAM) will drive the listing process.
"This decision supersedes earlier CCEA decision taken in June, 2017 for allowing IREDA to issue 13.90 crore fresh equity shares of Rs 10.00 each to the public on book building basis through IPO. The instant decision has been necessitated due to change in capital structure following infusion of capital to the tune of Rs 1,500 crore by the Government in March, 2022," according to an official statement on March 17.
#Cabinet approves listing of @IREDALtd on stock exchanges through an Initial Public Offer by part-sale of the Government’s stake in it and to raise funds through the issue of fresh equity shares by IREDARead here: https://t.co/OjBgPMQ0K6 #CabinetDecisions pic.twitter.com/l5ogLRsH0d
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The IPO will help in unlocking the value of the government’s investment and will also provide an opportunity to the public to acquire stake in the national asset and draw benefits from it. Besides, 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.
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IREDA is currently a wholly-owned Government of India, Mini-ratna (Category-I) CPSE incorporated in 1987 and is engaged in financing of Renewable Energy (RE) and Energy Efficiency (EE) projects in India. It is registered as a Non-banking Financial Company (NBFC) with the Reserve Bank of India (RBI).
The government, in line with the pledge made as a part of Nationally Determined Contribution (NDC) in 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 achievement of RE targets.
"The implementation and operation of renewable energy/energy efficiency projects by IREDA as per their business plan in line with the RE targets of GoI will help in creating direct and indirect employment opportunities for both skilled and unskilled manpower," read the statement.
